I.M.F. Predicts Worst Downturn Since the Great Depression

“This is a different sort of Great Depression,” he said. “This is a different kind of shock and it’s playing out in different ways at a very different speed.”

Governments around the world are grappling with how and when to reopen parts of their economies in hopes of reviving business activity. President Trump is expected to make an announcement this week that could provide guidance for scaling back stay-at-home orders.

But the economic recovery is expected to be slow until people are confident it’s safe.

“Even if spending starts to bottom in April, we see little chance of a meaningful pickup in activity in the immediate future,” economists at J.P. Morgan wrote in an April 9 research note, noting that reopening could lead to relapse. “We don’t think that the bottom of the current downturn will occur until May at the earliest.”

Bank of America economists said in a research note that “the coronavirus will cause the deepest postwar recession in U.S. history,” predicting a 6 percent hit to growth for the full year.

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said a quick rebound was unlikely, particularly if people continued to worry about getting sick.

“We know after the Great Depression people carried the scars of that experience with them for many, many years,” Mr. Kashkari said in an interview on the “Today” show on NBC. “I think the longer that this goes on, the more people who are affected by it, the longer that recovery is going to be.”

That view is not monolithic. Another Fed official suggested on Tuesday that the shutdown was costing $25 billion a day in lost output, and that blanket testing should be made available to get people back to work.

Article source: https://www.nytimes.com/2020/04/14/us/politics/coronavirus-economy-recession-depression.html