US, WASHINGTON (ORDO NEWS) — In an analysis note released on Sunday, analysts at Morgan Stanley Bank (NYSE: MS ) shared gloomy forecasts for the impact of the coronavirus on US GDP.
Morgan Stanley economists have said the coronavirus will inflict a deeper-than-expected recession, with the bank anticipating a record 30.1% drop in GDP in the second quarter from the previous year. Last week, the bank had already lowered its anticipation for Q4 to -4%.
The bank also estimates that unemployment will average 12.8% and that consumption will drop 31% in the second quarter.
“Economic activity practically stopped in March,” said economists. “As measures of social distancing multiply in a greater number of areas and as financial conditions tighten further, the negative effects on GDP growth in the short term become all the more important.”
For the current quarter, the Morgan Stanley team forecasts a 2.4% drop in GDP, but a recovery should begin in the third quarter.
For the whole of 2020, they forecast that the economy will grow by 0.3% thanks to a recovery in Q3 and Q4.
Remember, JPMorgan Chase (NYSE: JPM ) & Co. said last week that it’s Goldman Sachs, for its part, forecasts a 24% drop in GDP, and the head of the St. Louis Fed thinks that growth could fall by 50% in the next quarter.
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