The COVID-19 pandemic violated the already not perfect work of the global economy, causing not only human but also financial losses. Wall Street bigwigs are busy trying to assess the consequences of shutting down production, destroying supply chains and quarantines imposed around the world.
This weekend, analysts at Morgan Stanley presented their forecast. According to the financial conglomerate, US GDP growth in the second quarter is likely to fall to -30%, the level of the Great Depression. Earlier, Morgan Stanley predicted a decrease of 4%, that is, the forecast was reduced by almost eight times.
“Now we are witnessing a fall in GDP for the first quarter by 2.4%, since economic activity in March almost stopped, followed by a record decline of 30.1% in the second quarter,” the forecast said.
Morgan Stanley explains the impact of the pandemic on US GDP: “We anticipate a sharp decline in consumer spending on travel, restaurants, transportation and other services. This will leave a big hole in consumer spending in the second quarter, when, as we expect, real personal spending on an annualized basis will decrease by 31%. ”