Goldman Sachs Group has downgraded its U.S. growth estimation for the first and second quarters in the wake of the economic downturn from the coronavirus pandemic.
In a note sent Sunday, the U.S. bank stated it now sees real gross domestic product (GDP) growth of 0% in the first three months of the year, from its original estimate of 0.7% growth. For Q2, it sees U.S. growth contracting to -5.0% from its initial estimate of 0%.
Apart from the influence on consumer spending, Goldman stated it further revised its growth estimations as significant supply chain disruptions have increased.
That stated, the U.S. financial institution expects financial exercise to recover after April, with strong development in the second half.
However, that expectation, Goldman identified, depends on certain elements, such as the extent to which social distancing, or avoiding crowds or gatherings, in addition to seasonally higher temperatures will reduce infections in addition to whether proper treatments will emerge.
Goldman, therefore, expects higher growth for the Q4 of 4%, from its initial forecast of 2.25%, and sees further substantial gains in early 2021.
Its total GDP forecast for 2020 was right down to 0.4% from 1.2% initially.