The global economy is likely to recover to pre-pandemic levels by early next quarter, about three months earlier than previously expected, economists at Morgan Stanley said.
"The evidence indicates that the virus/economy equation has shifted decisively from the early days of the outbreak," they said in a note to clients, saying that the recovery has continued to gather momentum as countries get better at managing the virus, Reuters reported.
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The U.S. economy could reach its pre-COVID 19 levels by the second quarter of next year, while the entire developed markets could reach that level by the third quarter of next year, they said.
Coupled with unprecedented levels of fiscal and monetary support and possible disruptions to trade, the prospective recovery is likely to be accompanied by stronger inflation, they said.
Other forecasts
- Fitch Ratings in connection with the COVID-19 pandemic predicts a 4.6% fall in global GDP in 2020 year on year, which is 2.7 percentage points worse than the agency's forecast released in April.
- According to World Bank forecasts, the global economy will shrink by 5.2% this year. That would represent the deepest recession since the Second World War.
