Economists at Morgan Stanley are predicting a post-pandemic boom, with gross domestic product in the U.S. growing 5.9% in 2021, well above the 3.8% consensus of other forecasters.
The investment bank’s 2021 Global Economic Outlook, released this week, sees the U.S. joining in a worldwide economic rebound, with global GDP growing 6.4%, higher than the consensus of 5.4%. Growth in countries such as India and China will lead the way, followed by the U.S. and euro area countries.
The Morgan Stanley economists said the recovery they expected midyear is “now entering a new self-sustaining phase” and, unlike other economists polled by sources including Bloomberg and the IMF, they are less worried about the pandemic’s impact on the risk appetite of the private sector.
“We maintain that consumers have driven the recovery, and investment growth—a reflection of the private corporate sector's risk tolerance and a key feature of any self-sustaining recovery—is bouncing back as well,” Chetan Ahya, Morgan Stanley’s chief economist, wrote in the outlook.
Morgan Stanley’s degree of optimism about the recovery may be an outlier among economists, but isn’t all that surprising, given Wall Street’s apparent assessment of the long-term prospects. Benchmark gauges of the stock market continue to break record highs as investors look past the pandemic’s immediate damage to a future where COVID-19 vaccines enable activity to resume.