Coronavirus will slow the US economy

05 Feb 2020

Against Willbur Ross’ statement, Goldman Sachs says that Coronavirus will slow the US economy

Lately, we have been discussing the impacts of Coronavirus a lot. A disease is not a common subject for s site that talks about the economy, though. So why are we doing that? In one of our previous posts, we told you about a statement made by Donald Trump’s Secretary of Commerce. Wilbur Ross said that the virus could help Americans to get jobs in the near future. Of course, his declaration was received with a lot of criticism. However, his position on the subject is not the only one. Actually, Goldman Sachs declared that Coronavirus will slow the US economy.

This means that we can not be so quick in assuming that Coronavirus will turn up to be good. This might not be the case. Generally speaking, The Goldman Sachs Group, Inc., is an American multinational investment bank. Among its services, it offers services in investment management, prime brokerage, and securities underwriting. Thus, it is an institution that has knowledge of economic tendencies that have the power to change the US. According to Goldman Sachs analysts, we can expect a 0.4 percentage point decline on US annualized growth through March.

Coronavirus will slow the US economy
Goldman Sachs said that Coronavirus will slow the US economy. However, Wilbur Ross said the contrary. Who is right? (Source: Interesting Engineering)

Understand why Coronavirus will slow the US economy

A decrease of 0.4 percent is not that significant, you might say. However, it is not something positive as well. Against Wilbur Ross, the US will be affected, but not in a positive way. If you want to know why Coronavirus will slow the US economy, Goldman Sachs also has a word. According to them, there are two main reasons for the slight decline. Firstly, a decrease in Chinese tourists to the US is expected. Accordingly, there will be fewer exports to China.

As you can infer from all of this, China’s economy is not getting any benefit from their situation as well. With more people getting sick every day, the International Monetary Fund and the World Bank is expecting China’s economic growth to fall to about 6%. If we contrast this number of 6% against 0.4% that the US is waiting for, Americans will not be affected that much.

However, it is not okay to make declarations as that made by Wilbur Ross. Statements like the one he gave have the power of making people believe that they can get something good of something bad. This can be good when we consider that something bad happened to us and we want to give another meaning to it. Promoting a disease in order to make hopes rise is not the same thing. It promotes racism, prejudice, and egocentrism instead. Knowing that Coronavirus will slow the US economy is not something good, but it is a real piece of information that tells the truth as it is.

Source: CNN