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Goldman Sachs raises forecast of U.S. economy contraction to 4.6 pct in 2020

Global investment management firm Goldman Sachs lowered its forecast for the U.S. economy in a report published Saturday, saying it would grow at 25 percent in the third quarter of this year rather than its previous forecast of 33 percent.

Goldman Sachs Group Inc. economists said this would cause the U.S. economy to slump 4.6 percent this year, worse than the 4.2 percent previously predicted.

“A combination of tighter state restrictions and voluntary social distancing is already having a noticeable impact on economic activity,” the economists said.

In the meantime, the economists still maintained that next year’s expected GDP growth rate would be 5.8 percent. They are positive that unemployment will be at 9 percent at the end of this year, better than the previous estimate of 9.5 percent.

The optimism mainly stems from the fact that other economies have shown it’s possible to resume activity while keeping social distancing in place, said the economists led by Jan Hatzius.
Source: Xinhua

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