Morgan Stanley says a second wave of coronavirus won’t derail Asia’s economic recovery

CNBC reports that another wave of coronavirus outbreak in Asia will not be as economically damaging as the first, said a Morgan Stanley economist as several countries like China and South Korea recently experienced an uptick in the number of cases.

Worries that a second wave of infections would once again derail the global economy have heightened in recent months as an increasing number of countries are easing restrictions that were imposed to contain the coronavirus outbreak. The first round of lockdown measures, which stalled much of economic activity, sent global economies into a recession.

But Deyi Tan, who is also managing director at Morgan Stanley, said that if there is a second wave, it will likely be more manageable as policymakers have learned to handle such situations.  

“A double dip is not in our base case, we do acknowledge that as economies reopen, daily new cases will rise,” Tan told CNBC. A “double dip” refers to a situation in which an economy picks up following a period of decline, but weakens again after that.

She noted that several Asian economies — such as South Korea, Taiwan and Hong Kong — have started to ease restrictions since late April. Since then, some have reported a rise in daily new cases, “but in the bigger scheme of things, the trend is still relatively manageable compared to what we’ve seen before,” she added.

“So at this point in time, we don’t expect a second wave to actually cause the global economy, or Asian economies, to go through a double dip,” said Tan.