Coronavirus epidemic will lead to a significant decline in economic growth in the United States

As posted earlier, the coronavirus is causing increasing losses of human lives, tragedies, and inconveniences for many people in a growing number of countries. It is still too early to assess the economic consequences of the coronavirus for the United States. It would not be reasonable to publish precise numbers. One has to think in scenarios.

In brief: under an optimistic scenario (that is increasingly unlikely), there will only be a growth slowdown. GDP growth in 2020 would then be at around one percent (well below the 2,3 percent in 2019; in January of this year, I had expected a growth rate of two percent in 2020). Under a more pessimistic scenario, there will be negative growth in the first half of 2020 followed by a moderate recovery. Overall, around zero GDP growth would be the result. Under a more dramatic scenario, we would have a serious economic crisis with a large and persistent drop in consumption and investment, higher unemployment, and growing financial stability risks. Negative economic growth in 2020 would result under this dramatic scenario.

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