Goldman Sachs, one of the largest banks in the world, published a new report on the future of the US economy. Evaluating the economic effects of the coronavirus, Goldman Sachs economists think that a very difficult period is waiting for the USA.
Historical Decline To See
According to the news of CNBC, Goldman Sachs has published a report that can be considered as a warning.
Goldman Sachs published a report just five days ago and evaluated the current state of the economy. In this report, experts from Goldman Sachs stated that gross domestic product (GDP) could fall by 5% in the second quarter of the year. However, the report published by Goldman Sachs today brings a much more painful picture.
Goldman Sachs economists expect the gross domestic product in the USA to drop by 6% in the first quarter and 24% in the second quarter. We can use historical data to show how serious this is. In the last quarter of 2008, that is, during the financial crisis that covered the world, the gross domestic product in the USA decreased by 8%.
Economists expect the gross domestic product to increase by 12% in the third quarter of the year. This rate is expected to increase by another 10% in the last quarter. However, it is estimated that the unemployment rate in the country will increase up to 9%.
Many businesses are currently closed in states in the US, such as California and New York. While officials in New York started quarantining public institutions, managers in California started quarantine across the state. According to Goldman Sachs economists, all these practices will hit a heavy blow to the economy:
“The social isolation practices we have seen in the past few days have greatly affected the daily life in the USA. There is a historical increase in the number of people who are laid off and have to cut their spending. In addition, schools, shops, offices, production facilities are closed. All these developments show that the gross domestic product will fall in the 1st and 2nd quarters. ”