It could be years before the U.S. economy rebounds from the economic impact of the coronavirus pandemic, former chair of the Federal Reserve Ben Bernanke said during an online event on Tuesday (April 7), according to a Reuters report.
He said the U.S. economy could drop 30 percent or even more in this quarter alone as many businesses remain closed and people stay home in an effort to contain the fast-spreading virus.
“Overall, it could be a very bad year for the economy,” Bernanke said in a Brookings Institution online event.
“There are things we can do to open up the economy, significantly perhaps, but I don’t see the economy returning to a more normal state until there’s much greater confidence ... that opening up the economy won’t restart the crisis,” he said.
He was hopeful, however, that the economic rebound would be quicker than recovering from the Great Recession following the 2007-09 financial crisis.
“The U.S. economy will recover and within a few years will show only modest marks of this experience,” he said.
He added that everything is dependent on how long the virus keeps the world in limbo. Over 90 percent of Americans were forced to close down all businesses except those deemed essential, and millions of people are without paychecks. Further, a vaccine won’t be available for at least a year, Bernanke said.
“If we could shut off the epidemic, of course the economy would bounce back quickly,” he said. But it is more likely that activity will only be restarted gradually and may need to be slowed again if the virus re-surges, he said.
The total number of jobs that will be lost because of the coronavirus sits at around 5 million as of March 22. The economic shortfall could hit $1.5 trillion, and a recession is almost certainly going to happen, experts said. The downturn, according to experts, could last months.