“There is no telling how severe the C-19 recession will be,” says Robert Sonora, director of health care research at the Bureau of Business and Economic Research, UM, in the most recent issue of Montana Business Quarterly. According to Sonora, “Recent guesstimates put second quarter economic growth in the -5 to -10 percent range.
It goes without saying it has disrupted the normal flow of economic activity in structurally different ways to the 2008 financial crisis. There is also speculation that this recession will lead to another financial crisis, though not of the same ilk as the last one.
“Today, banks are better capitalized, household debt burdens are lower and personal savings are higher. However, the perfectly rational response that people stay quarantined will have considerable demand effects in the short run, but once the quarantine is over, pent-up demand will get the economy moving again. We just need to help households and small businesses weather the immediate challenges.”