Politics

Morgan Stanley: Second wave of coronavirus won’t derail economic recov

Another wave of coronavirus outbreak in Asia will not be as economically damaging as the first, said a Morgan Stanley economist as several countries like China and South Korea recently experienced an uptick in the number of cases. Report informs citing the CNBC.

Worries that the second wave of infections would once again derail the global economy has heightened in recent months as an increasing number of countries are easing restrictions imposed to contain the coronavirus outbreak. The first round of lockdown measures, which stalled much of economic activity, sent global economies into a recession.

But Deyi Tan, who is also managing director at Morgan Stanley, said that if there is a second wave, it will likely be more manageable as policymakers have learned to handle such situations.

“A double-dip is not in our base case; we do acknowledge that as economies reopen, daily new cases will rise,” Tan told CNBC’s “Squawk Box Asia” on Wednesday. A “double-dip” refers to a situation in which an economy picks up following a period of decline but weakens again after that.

She noted that several Asian economies — such as South Korea, Taiwan, and Hong Kong — have started to ease restrictions since late April. Since then, some have reported a rise in daily new cases, “but in the bigger scheme of things, the trend is still relatively manageable compared to what we’ve seen before,” she added.

“So at this point, we don’t expect a second wave to cause the global economy, or Asian economies, to go through a double-dip,” said Tan.

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