Business economists foresee 5.6% drop in GDP in 2020.

The June outlook survey of the National Association of Business Economists extends the near-term pessimism.

NABE Outlook Survey panelists expect a 5.6% decline in inflation-adjusted gross domestic product from the fourth quarter of 2019 to the fourth quarter of 2020,” said NABE President Constance Hunter, CBE, chief economist, KPMG. “Panelists expect the largest decline, 33.5%, annualized, quarter-over-quarter, in the second quarter of the year. These decreases reflect the impact of the COVID-19 pandemic.”

“The NABE panel remains decidedly pessimistic about the second quarter of the year, as 80% of participants view risks to the outlook tilted to the downside,” added Outlook Survey Chair Eugenio Aleman, economist, Wells Fargo Bank.

The Associated Press reports,

The NABE panel of 48 forecasters expects the 5% annual GDP drop that occurred in the January-March quarter to be followed by a record 33.5% annual plunge in the current April-June quarter. Yet the NABE panel foresees economic growth returning in the second half of the year, with strong annual expansions of 9.1% in the July-September quarter and 6.8% in the October-December quarter. Even so, those gains would fall far short of making up for the dizzying economic contraction in the first half of this year.

In 2021, the panel forecasts GDP growth of 3.6%. But not until at least the second half of next year, according to an overwhelming majority of the forecasters, will the economy recover all its lost output from the recession. If a second eruption of viral infections were to occur, though, it would likely take much longer.

A lot of uncertainty right now.