Goldman Sachs: "Advanced Economies' Q2 Economic Growth Rate to Decrease by 35%"

[Asia Economy Reporter Jeong Hyunjin] Goldman Sachs has forecasted that the economic growth rate of advanced countries such as the United States and Europe will decrease by 35% quarter-on-quarter in the second quarter due to the impact of the novel coronavirus infection (COVID-19).

According to Bloomberg News on the 13th (local time), Jan Hatzius, Chief Economist at Goldman Sachs, stated this in a memo sent to clients on the same day. The 35% decrease forecast is four times the record set during the global financial crisis in 2008.

Chief Hatzius said, "Since we do not know how quickly people can return to work, the question of how fast the economy will recover remains an 'open question'." While noting that the number of COVID-19 cases worldwide is approaching its peak, he added, "The issue is that the improvement in the situation is a result of social distancing and a sharp decline in economic activity, and if people return to work, the situation could change rapidly."

Chief Hatzius evaluated that policymakers worldwide are generally making efforts to maintain wages and credit to prevent economic damage caused by COVID-19, allowing households and businesses to survive without going bankrupt. However, he emphasized that Europe should take more proactive measures and that relatively wealthy countries with funds should assist developing countries.

Chief Hatzius pointed out, "Europe's response needs to show a greater commitment to fiscal easing and an unconditional promise to do whatever it takes to preserve the integrity of the Eurozone," adding, "Emerging economies will require more assistance from wealthy countries to navigate through the crisis."

This content was produced with the assistance of AI translation services.