Morgan Stanley and Goldman Sachs are now both forecasting a recession in 2020 driven by the coronavirus pandemic.

The downturn is expected to be less severe than the 2008 financial crisis but sharper than the 2001 recession, analysts and economists at the banks said.

“While the policy response will provide downside protection, the underlying damage from both COVID-19’s impact and tighter financial conditions will deliver a material shock to the global economy,” Morgan Stanley economists led by Chetan Ahya said earlier this week.

Goldman Sachs analysts said they expected GDP growth to slow to zero in the first quarter then contract by 5% in the second quarter. It is then projected to rebound in the second half of the year, with 3% growth in the third quarter and 4% growth in the fourth quarter.

“The uncertainty around all these numbers is much greater than normal,” Goldman Sachs said.

Goldman is now forecasting annual GDP growth of 0.4%, down from its previous estimate of 1.2%.

“Would the [National Bureau of Economic Research} business cycle dating committee classify our new forecast as a recession, given that it involves only one quarter of strictly negative growth? It is not entirely clear, but we think the answer is probably yes,” Goldman analysts said.

Last week, JPMorgan said a recession would hit the economies of Europe and the United States by July but noted its views of the impacts of the coronavirus had, “evolved dramatically in recent weeks.” Bank analysts said they were monitoring policy responses to gauge whether the recession would become a “traditional and longer-lasting recession event.”

Cases of COVID-19 brought on by the novel coronavirus had surpassed 218,000 globally Thursday afternoon, with more than 10,000 cases in the U.S.

The Trump administration is making contingency plans for an outbreak that could last “18 months or longer” and include “multiple waves of illness.”

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