Economists at Morgan Stanley and Goldman Sachs Group Inc. said that the coronavirus will cause more economic damage than they originally thought.
About it reports “Hvil”.
Analysts at investment Bank Morgan Stanley in a report informed the clients that the U.S. gross domestic product in April-June will fall by 30.1%. According to them, this will lead to a rise in unemployment to an average of 12.8%.
According to the version of their colleagues, Jan Hatzius from Goldman Sachs, the global economy will shrink by about 1% this year, that will be a big downturn than even in 2009, amid the financial crisis. Also, Goldman Sachs has already predicted a fall in US production by 24% in the next quarter.
Such projections raise some concerns, but economists at Morgan Stanley in a separate report stated that one should avoid sustained contraction, given the response of policymakers in the area of fiscal and monetary policy. However, Morgan Stanley, and Goldman Sachs expect the global economic recovery, which will begin in the third quarter.
“Economic activity in March almost stopped. To the extent that, as measures of social spacing increase in a greater number of fields as financial conditions tightened even more, negative consequences for GDP growth, in the short term, become much stronger,” said economists at Morgan Stanley.
In an interview with Bloomberg President of the Federal reserve Bank of St. Louis James Bullard predicted that unemployment could reach 30% in the second quarter due to combat coronavirus, with an unprecedented fall in GDP by 50%.
In addition, the baseline scenario Bank of America Corp implies a fall in GDP in the second quarter almost 25%, while JPMorgan Chase & Co. predicts a decline of 14%.