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Morgan Stanley economists double down on V-shape global recovery

The economists said they expect global GDP growth will trough at -8.6 per cent year on year in the second quarter

global economy
Deleveraging pressures will be more moderate
Bloomberg
1 min read Last Updated : Jun 16 2020 | 2:13 AM IST
The global economy is in a new expansion cycle and output will return to pre-coronavirus crisis levels by the fourth quarter, according to Morgan Stanley economists.

“We have greater confidence in our call for a V-shaped recovery, given recent upside surprises in growth data and policy action,” economists led by Chetan Ahya wrote in a mid-year outlook research note on June 14.

Predicting a “sharp but short” recession, the economists said they expect global GDP growth will trough at -8.6 per cent year on year in the second quarter and recover to 3.0 per cent by the first quarter of 2021.

Why the recession will be short?

  • This is not an endogenous shock triggered by huge imbalances
  • Deleveraging pressures will be more moderate
  • Policy support has been decisive, sizable and will be effective in boosting the recovery

Topics :Morgan StanleyGross domestic productGDP growth

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