Thread by @GregDaco

#Coronavirus recovery scenarios – one decent, none great

via @OxfordEconomics

oxfordeconomics.com/my-oxford/publ…

Putting the #COVID19 shock in the context of US #recessions of the last 100 years

Our @OxfordEconomics baseline anticipates a gradual and uneven relaxation of social distancing measures through the summer such that #GDP and consumer spending are unlikely to return to their Q4 2019 level until mid-2021 – roughly 15-18 months after the initial #COVID19 shock.

However, lingering uncertainties around the duration of the #lockdown, the normalization phase, and the possibility of a second wave of #coronavirus contagion skew the distribution of outcomes to the downside

Our medium-term downside scenario features a sharp #COVID19 shock compounded by corporate sector defaults and tumbling asset prices.
With demand and supply structurally damaged by the virus shock, the economy never recoups its prior dynamism – #GDP growth remains stuck below 1%.

Our double-dip scenario features a hurried reopening of the economy in the coming months followed by a second #COVID19 contagion wave in the fall, another #lockdown, and a severe contraction in activity in Q4.

The economy remains 10% smaller by 2023.