BUSINESS ECONOMISTS EXPECT WORST DIVE SINCE 1940s
Business economists expect the United States to suffer its worst downturn this year in more than seven decades before growth resumes sometime next year, Martin Crutsinger wrote for the Associated Press (AP) on June 9, 2020 .
A survey released Monday by the National Association for Business Economics predicts that the gross domestic product — the total value of goods and services produced in the US — will fall 5.9% for 2020 as a result of the recession triggered by the virus. That would be the sharpest annual decline since the gross domestic product (GDP) fell 11.6% in 1946, when the nation was demobilizing after World War II.
The NABE panel of 48 forecasters expects the 5% annual GDP drop that occurred in the January-March quarter to be followed by a record 33.5% annual plunge in the current April-June quarter. Yet the NABE panel foresees economic growth returning in the second half of the year, with strong annual expansions of 9.1% in the July-September quarter and 6.8% in the October-December quarter. Even so, those gains would fall far short of making up for the dizzying economic contraction in the first half of this year.
In 2021, the panel forecasts GDP growth of 3.6%. But not until at least the second half of next year, according to an overwhelming majority of the forecasters, will the economy recover all its lost output from the recession. If a second eruption of viral infections were to occur, though, it would likely take much longer. “Eighty-seven percent of panelists view a second wave of COVID-19 as the greatest downside risk through 2020,” added Eugenio Aleman, an economist for Wells Fargo and the chairman of the outlook panel. He noted that 51% of the economists regard the potential discovery of an effective vaccine as offering the biggest upside potential for the economy.