Mohamed El-Erian sees US economy contracting up to 14% this year due to coronavirus crisis

Mohamed El Elian, chief economic adviser for Allianz, the parent of Pimco, recently spoke to Morningstar Research Services Global Director of Research Manager Jeff Ptak in a special issue of Morningstar’s Morning View podcast.

El-Erian talked about the impact of this pandemic on global markets and international investment as the world deals with the effects of coronaviruses.

EE economy. An American coronavirus pandemic could see a double-digit reduction in 2020, Mohamed El Elian told CNBC on Monday, suggesting a sharper decline than most economists.

I think we can grow from -10% to -14% in the US. Chief Financial Advisor of Allianz, USA, said in Squawbox. This is a great success.

Mohamed El-Erian sees US economy contracting up to 14% this year due to coronavirus crisis
Mohamed El-Erian sees US economy contracting up to 14% this year due to coronavirus crisis

El-Erian said the characteristic nature of this recession due to the health crisis means that traditional frameworks are not applicable and may act as additional obstacles to rebound.

The profit you usually expect, lower oil prices, means more dollars in the consumer’s pocket, even if it doesn’t work in this economy. So I’m currently at the consensus of economists. I’m a little more worried. 

El-Erian, Pimco’s former CEO of Investment Power, comments on data from CNBC’s Rapid Update poll, which includes some forecasts of Wall Street GDP. Average estimates at the end of last week show that US GDP fell by 4%. This year, according to Steve Liesman 

The International Monetary Fund (IMF) last week said the US economy could contract by 5.9% in 2020.

In a follow-up call with CNBC, El-Erian stressed that there was tremendous uncertainty surrounding all economic forecasts, including his own, saying, I hope I’m wrong. It was.

But El-Erian said he believed the process of resuming economic activity after a pandemic would be difficult. The best they can do is help until people are able to do it and are willing to return to normal economic activity.

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