Borrowing Costs Still Too Low to Cool Inflation, Economists Say

Economists surveyed by Wolters Kluwer say current borrowing costs remain too low to cool inflation. Their forecast puts business spending growth at a 12.6% annual rate this year before it slows to 6.2% in 2027.

That gap tells most of the story. Firms are still expanding aggressively while credit stays relatively cheap, and the economists don't expect that momentum to fade quickly. Instead, they see a gradual glide down over the next two years rather than a sharp stop.

What does this change for businesses?

For companies planning capital budgets, the survey suggests the window of strong, cheap-money-fueled growth stays open through this year. The 12.6% figure signals continued appetite for equipment, technology and expansion projects while conditions hold.

But the projected drop to 6.2% by 2027 means planners should expect a meaningful deceleration. Growth doesn't vanish in the forecast — it roughly halves.

For anyone watching prices, the economists' core message is blunt: rates haven't yet done enough work. As long as borrowing costs stay at levels the survey panel considers too low, inflation pressure persists alongside robust spending.

The Wolters Kluwer survey draws on a panel of economists, giving the forecast a collective weight that a single bank's outlook can't match. Two numbers anchor it:

• 12.6% — expected annual growth rate of business spending this year.
• 6.2% — expected annual growth rate in 2027, less than half the near-term pace.

The trajectory implies economists believe tightening will eventually bite — just not yet. If the forecast holds, the cooling arrives gradually, giving firms time to adjust rather than forcing abrupt cuts.

The so-what for the next two years: businesses that have been leaning on inexpensive credit to fund growth may want to lock in plans early, because the survey's arc points to a slower, more expensive environment by 2027.