As more states begin to reopen businesses this week, Moody’s Analytics chief economist Mark Zandi warns that a spark in new coronavirus infections would likely send the economy further into a tailspin — especially as no vaccine is currently available.
“If we get a second wave, it will be a depression,” the firm’s chief economist told CNBC. “We may not shut down again, but certainly it will scare people and spook people and weigh on the economy.”
Zandi has been warning about the pandemic’s effect on the economy for months. In late February, he told CNBC that he thought Wall Street was underestimating the pandemic’s potential damage. His forecast came before states imposed strict lockdowns to contain the spread of the virus.
Zandi notes that solid progress on a vaccine may be the only way for the economy to rebound. A delay or failure to come up with a vaccine within the next year or so would likely cause a 1930s-type downturn, he says.