As the world economy balances mitigating the health risks of COVID-19 with the economic risks, unprecedented measures are being taken. This includes quarantines and the closure of non-essential businesses as well as the fiscal and monetary measures aimed at cushioning the economic blow. KPMG’s Office of the Chief Economist expects the best case scenario will be a “U” shaped recovery and assigns a 50% probability to this scenario at this time. The CARES Act will mitigate the economic loss and prevent a depression, however, the magnitude of the collateral damage from the debt unwind and the interconnectivity of the capital markets will ultimately determine if the recession turns into an “L” shape.
KPMG’s Office of the Chief Economist is continuously monitoring key developments in this unprecedented situation and refinements to the economic model occur daily. To learn about our current scenario analysis, including deep background on the underlying cause and effect dynamics, please download our latest report, A Bridge Past COVID-19: The Path for the Economy.
Due to the rapidly evolving nature of this situation, we update our analysis frequently. Please check back often for our latest report.