US economic growth could halve this year in even the softest coronavirus scenario, top research firm says

US economic growth could halve this year in even the softest coronavirus scenario, top research firm says

Business·2020-03-04 04:42

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Central banks are , but a from the Brookings Institution lays out several dire projections for the outbreak’s hit to US economic growth.

Researchers detailed three pandemic scenarios with varying degrees of severity, and even the softest estimate sees GDP growth tumbling 2%, or $420 billion, from their baseline.

Current-dollar GDP grew by 4.1% in 2019, leading Brookings’ estimate to project a halving of US growth.

Though central bank rate cuts help pad consumer spending in the wake of the outbreak, the coronavirus epidemic requires “monetary, fiscal, and health policy responses” in afflicted countries, the researchers wrote.

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Projections for the coronavirus’ hit to US economic growth range widely, but a new study by the Brookings Institution suggests even a relatively mild pandemic would slice 2020 gross domestic product in half.

The outbreak has already strained global supply and demand through supply chain disruptions, labor shortages, and strict quarantine orders. Monetary authorities around the world are now racing to protect against economic slowdown and boost consumer spending. The Federal Reserve was among the first central banks to act against the virus’ fallout, issuing its first emergency rate cut in 12 years on Tuesday morning.

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