Economists from Morgan Stanley have predicted that the world economy will return to pre-coronavirus levels by the year’s end, creating a “v-shaped recovery.”

Morgan Stanley: “The Recovery Will Gather Further Momentum”

“We have greater confidence in our call for a V-shaped recovery, given recent upside surprises in growth data and policy action,” said Chetan Ahya, the chief economist at Morgan Stanley. “The global economy bottomed in April and the recovery will gather further momentum, making this a short recession.”

The Morgan Stanley team is arguing that the US economy has “moved into expansion,” past the insanely sharp dip and deflation caused by the coronavirus outbreak. It seems likely that this was helped by the decisive action taken by the government when passing the $2.2 trillion CARES Act that gave every American $1,200 to spend and stimulate the economy, along with further packages for businesses.

Larry Kudlow, the economic advisor at the White House, backed this judgement.

“I think we’re off to the races in what will be a strong v-shaped recovery,” he told Maria Baritromo on Sunday.

The global economy is likely to grow by 3% in the first quarter of next year, the Morgan Stanley economists predicted, a strong reversal from the coronavirus drop.

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A Quick Escape From These Tough Times?

In these times of great strife and division across the country and the world, I think it’s safe to say that this good news should be welcomed with open arms. I think this is just what everyone who has been suffering these past few months wants to hear – that there is a light at the end of the tunnel, and we won’t be plunged into years of economic problems.

It also looks like the actions of governments across the world to help businesses and citizens through the coronavirus are working. While we face a far deeper and sharper recession than in 2008, as more people go back to work and to school, this v-shaped recovery should bring us right back to normal.