US economy to contract 37.7% in Q2: Budget office

ISTANBUL

The US economy, which narrowed by 4.8% in the first quarter, is expected to contract dramatically by 37.7% year-on-year in the second quarter amid the coronavirus pandemic, the Congressional Budget Office said on late Tuesday.

Measures, such as social distancing, to stem the spread of the COVID-19 affected both the overall demand and supply of goods and services in the country and caused a plunge, the office noted.

According to the office's forecasts, the US economy will increase by 21.5% and 10.4% in the third and fourth quarters, respectively.

The office also expected a decline of 5.6% for 2020 and a positive growth of 4.2% for the next year.

"In April, the unemployment rate surged to 14.7%, the highest rate in the history of the monthly data series.

"In CBO’s projections, the unemployment rate averages 15% in the second quarter of this year and rises to 16% in the third quarter," it added.

The rate was forecast to drop gradually to 8.6% till the last quarter of 2021, the office noted.

After originating in Wuhan, China last December, COVID-19 has spread to at least 188 countries and regions, with Europe and the US currently the worst hit.

The pandemic has killed over 323,300 people worldwide, with more than 4.9 million confirmed cases, while recoveries have reached almost 1.7 million, according to figures compiled by the US-based Johns Hopkins University.

In the US, the virus has so far infected nearly 1.53 million people and caused 91,921 deaths.