Morgan Stanley experts are looking at complete recovery by the end of year, and are confident that the economy will be back at pre-coronavirus levels by the fourth quarter. The firm noted three reasons why the recession will short-lived:
- Huge imbalances did cause an endogenous shock
- Deleveraging pressures will be more moderate
- Policy support has been decisive, sizable and will be effective in boosting the recovery
In the US, more economists are seeing a V-shaped recovery in the making, instead of the previous thought W or U shaped models. They noted recent positive announcements from the federal government including the generation of an additional 2.5 million non-farm jobs, and the low interest rates from the Federal Reserve.
Analysts expect most countries to post negative GDPs in the second quarter and strongly rebound in the third towards full recovery by the fourth. Even if the timetable for the coronavirus vaccine remains uncertain, they foresee that recurring outbreaks can be more controlled and managed compared to earlier this year.
Watch this video to see more of Morgan Stanley’s forecast of the V-Shaped Global Recovery.