Some economists aren’t ruling out a near-term rebound. Those at Morgan Stanley said in a report on Friday that while the fallout may now run into the second quarter, they still predict that “the recovery is being delayed, but not derailed.”
Much ultimately depends on how the virus spreads and what economic pain it causes, reversing gains economists had hoped for after the interim U.S.-China trade deal. The economies of Japan, Italy and France already contracted in the fourth quarter, while U.S. government data on Thursday showed underlying demand in the economy was slower than initially reported in that period.
A 2007 World Bank study estimated the cost of a mild flu pandemic at 0.7% of global gross domestic product, and 4.8% for a severe outbreak.
“In 2020 money, that’s between $630 billion and $4.3 trillion -- or, to put it another way -- between painful but manageable and global recession,” Tom Orlik, chief economist at Bloomberg Economics, wrote in a note.
This article was provided Bloomberg News.