INSUBCONTINENT EXCLUSIVE:
By Christopher Condon and Jeff KearnsGoldman Sachs Group Inc
and Morgan Stanley economists joined the rush on Wall Street to declare that the coronavirus has triggered a global recession, with the
debate now focusing on its likely length and depth.
A day after President Donald Trump conceded the United States slump alone is set to be
At Goldman Sachs, Jan Hatzius and colleagues predict a weakening of growth to 1.25%
S-P Global added its voice to the chorus with a report expecting that growth would range 1% to 1.5%.
BloombergSuch slumps would not be as
painful as the 0.8% contraction of 2009, as measured by the International Monetary Fund, but they would be worse than the downturns of 2001
Both Morgan Stanley and Goldman Sachs anticipate a rebound in the second half, but warn that the risk remains of even greater economic
pain.
The projections will apply further pressure on policy makers to do more to limit the health emergency and to deliver stimulus that
Our previous forecast for the year was growth at 5.2%
fellow central banks have been active in loosening monetary policy, most governments have been slow in responding and are only now crafting
economists said.
The outlook could darken even further if the virus lasts longer than anticipated, or wields greater economic pain -- given
factories, schools, restaurants and shops are closing around the world
A freezing up of markets or a continued sluggishness by governments to act are also regarded as threats.
Elsewhere on Wall Street,
strategists are laying out what governments should be doing.
At JPMorgan Chase - Co., John Normand advocated developed economies repeating
their handiwork of the crisis when they delivered fiscal stimulus worth 1% to 2% of gross domestic product
George Saravelos, a currency strategist at Deutsche Bank AG, said governments may also need to step in to guarantee support for households
and most economists failed to capture how far it would fall, with the likelihood now that its economy will suffer the worst turmoil in many
The Morgan Stanley economists now reckon its economy shrank 5% in the second quarter.
Since the outbreak originated in China, data is being
Morgan Stanley predicts the United States and European economies will suffer the most in the second quarter.
Predictions for the United
States still vary wildly, with some guessing activity could even decline as much 10% on an annualized basis in the three months through
