MOUNT LAUREL, N.J. — Gov. Phil Murphy told a group of business leaders in South Jersey on Wednesday that he's anticipating a “shallow” and “short-lived recession” is on the horizon.

“The challenge we have is not to control the war in Europe or the supply chain — although we'll do everything we can — but to outperform what our economy does generally,” Murphy said during a keynote speech at a Chamber of Commerce Southern New Jersey event. “I'm in the camp of a shallow, a meaningful but a shallow, fairly short-lived recession. And part of the reason I believe that is that there's an enormous amount of liquidity on the sidelines.”

Murphy, a former executive at Goldman Sachs, cited the state’s unspent federal dollars from the American Rescue Plan, the state’s surplus and billions expected from the bipartisan infrastructure bill President Joe Biden recently signed as reasons for optimism.

The governor’s comments come as he is expected to give his budget address next month and other states, like California, are facing massive budget deficits.

“It's axiomatic that the economy is going to slow down,” Murphy said. “We haven't seen it yet in our revenues at the state level. I know California in a very pronounced way has. We have not. But that does not mean we're not preparing for what will be thin ice.”

Murphy predicted in September a “50/50” chance of a recession.

Most economists have predicted recession will hit sometime in 2023.

During the speech, the governor also announced an agreement between the New Jersey Economic Development Authority and Atlantic Shores Offshore Wind, the developer of one of the state’s three approved offshore wind farms. The letter of intent outlines the company’s plans to lease 35 acres of land at the New Jersey Wind Port, in Lower Alloways Creek. Such a deal has been expected since the Board of Public Utilities gave the company permission to build the project in 2021.