US, WASHINGTON (ORDO NEWS) — The US economy will decline by 5.5% in 2020, which will be the sharpest decline since 1946, while in the second quarter, GDP will fall by 38%, Morgan Stanley predicts.
The outbreak of coronavirus and restrictive measures designed to curb its spread have undermined business and consumer activity.
According to the American bank, in the first quarter the world’s largest economy will shrink by 3.4%, rather than 2.4%, as previously expected.
In the second quarter, the economy is expected to contract by 38%. The previous forecast suggested a decrease of 30%.
US unemployment is expected to hit a record 15.7% in the second quarter. This is above the previous forecast of economists Morgan Stanley at 12.8%. The bank predicts a cumulative loss of 21 million jobs in the second quarter.
In the past two weeks, nearly 10 million Americans have applied for unemployment benefits.
The US economy is already in a downturn, and the speed of its recovery will depend on how much help the government provides, the Federal Reserve said on Thursday.
Congressional Budget Office forecasts that US GDP will decline by more than 7% in the second quarter as the health crisis intensifies.
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