Coronavirus: A deeper recession but not depression – Morgan Stanley


Falling demand and disrupted supply chains will trigger a global economic recession. However, strong monetary and fiscal policy responses under way could set the stage for a second-half rebound, according to economists at Morgan Stanley.

Key quotes

“Chief U.S. Economist Ellen Zentner now expects a full-year 2020 contraction of 3.0%, instead of her previous 0.6% growth forecast. Such a decline would trim global growth to 0.3% for 2020.”

“The global economy is set to contract on an annualized basis by 0.6% and 2.1%, respectively, in the first and second quarters. If a recovery takes root in the third quarter, the global economy could rebound to 4.8% growth, YoY, in 2021.”

“Chief China Economist Robin Xing base case for China’s economy is now 4% growth for 2020 and 7.5% for 2021.”

“In the euro area and the UK, Chief Economist Jacob Nell expects the euro area economy to contract by 5% this year, and the UK’s GDP to contract by 5.1% in 2020. Assuming that the pandemic peaks by April/May, euro area and UK growth could rebound 5.5% and 5.6%, respectively, in 2021.”


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