Balotelli is yet to justify his £16million signing from AC Milan in August, having previously endured an erratic 18 months at the San Siro.
And with Balotelli courting further criticism for swapping shirts with Real Madrid defender Pepe at half-time of the 3-0 home defeat in the Champions League last night, Carragher expects a swift Anfield exit for the 24-year-old.
"I'd be surprised to see him here next season," said the Sky Sports pundit, who made over 500 outings for the Reds in a 17-year spell on Merseyside.
Carragher added: "It was just a panic; they needed someone. They left it too late and they've bought different players in different positions instead of maybe going out, not spending the whole Suarez money on one player, but buying two or three big players.
"A lot of the players have come in and done a decent job here and there, but nobody's really done anything.
"They bring in Balotelli late on - it's obviously a panic."