Economists from Morgan Stanley have predicted that the world economy will return to pre-coronavirus levels by the year’s end, creating a “v-shaped recovery.”
“We have greater confidence in our call for a V-shaped recovery, given recent upside surprises in growth data and policy action,” said Chetan Ahya, the chief economist at Morgan Stanley. “The global economy bottomed in April and the recovery will gather further momentum, making this a short recession.”
The Morgan Stanley team is arguing that the US economy has “moved into expansion,” past the insanely sharp dip and deflation caused by the coronavirus outbreak. It seems likely that this was helped by the decisive action taken by the government when passing the $2.2 trillion CARES Act that gave every American $1,200 to spend and stimulate the economy, along with further packages for businesses.
Larry Kudlow, the economic advisor at the White House, backed this judgment.
“I think we’re off to the races in what will be a strong v-shaped recovery,” he told Maria Baritromo on Sunday.
The global economy is likely to grow by 3% in the first quarter of next year, the Morgan Stanley economists predicted, a strong reversal from the coronavirus drop. – READ MORE