Morgan Stanley and Goldman Sachs economists have declared that the global economy has entered a recession triggered by the coronavirus.
Other Wall Street analysts have also made the call, with the debate now shifting to how long it will last and how deep it will be.
The coronavirus, which started in the city of Wuhan in China in November and has infected more than 252,000 people worldwide, has spread across that world and has caused the shutdown of economies including in Europe and the U.S.
The U.S. has had more than 14,000 infection cases.
“While the policy response will provide downside protection, the underlying damage from both COVID-19’s impact and tighter financial conditions will deliver a material shock to the global economy,” Morgan Stanley economists led by Chetan Ahya said in a note.
Goldman Sachs analysts said they expected GDP growth to slow to zero in the first quarter, then contract by 5 percent in the second quarter before rebounding in the second half of the year, with 3 percent growth in the third quarter and 4 percent growth in the fourth quarter.
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“The uncertainty around all these numbers is much greater than normal,” Goldman Sachs said.
JPMorgan had said a recession would hit the economies of Europe and the U.S. by July, but noted its views of the impacts of the coronavirus had “evolved dramatically in recent weeks.”
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