Global economy to see a V-shaped recovery by Q4 2020 – Morgan Stanley

Dhwani Mehta FXStreet

In a mid-year outlook research note, Morgan Stanley economists led by Chetan Ahya offered an optimistic take on the global economy, with a V-shaped recovery projected by the fourth quarter of this year.

Key quotes

“We have greater confidence in our call for a V-shaped recovery, given recent upside surprises in growth data and policy action.

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

In our base case, we assume that the second wave of infections will occur by autumn, but that it will be manageable and result in selective lockdowns, citing a scenario where a vaccine is broadly available by summer of 2021.

In contrast, we assume in our bear case that we re-enter into the strict lockdown measures implemented earlier this year, resulting in a double-dip.”

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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