“I think we could have growth of minus 10% to minus 14% for the United States,” said Allianz chief economic officer on “Squawk Box”. “It is a great success. “
El-Erian said the distinct nature of this economic crisis – resulting from a health crisis – means that traditional frameworks may not be applicable, which is an additional obstacle to a rebound. “The benefits that you would normally expect, the drop in the price of oil means more dollars in the pockets of consumers, even it doesn’t work in this economy. So I’m a little more worried than what the consensus of economists is right now. “
Comments by El-Erian, former CEO of Pimco, were in response to data from CNBC’s Rapid Update survey, which includes various forecasts for Wall Street’s gross domestic product. The average estimate at the end of last week showed a drop of around 4% in US GDP this year, according to Steve Liesman of CNBC.
The International Monetary Fund said last week that the US economy could shrink 5.9% in 2020. The IMF said the world would “most likely” experience its worst economic hit since the Great Depression.
In a follow-up call with CNBC, El-Erian pointed out that there is “enormous uncertainty” around any economic forecast, including his own, saying, “I hope I am wrong. “
However, he said he thought the process of resuming economic activity after a pandemic would be difficult. “Until people are both able and willing to resume normal economic activity, the best you can do is relieve yourself. “