The United States (US) economy is likely to experience a sharp decline or contraction in the first quarter of 2021.
"At the national level, at the moment, I expect moderate growth in the fourth quarter of last year, before growth is significantly slower in the first quarter of this year - possibly negative growth," said Philadelphia Federal Reserve Bank President Patrick Harker in a virtual event hosted by the Philadelphia Business Journal .
"The good news is, the weakness may be temporary - because we all hope the Covid-19 vaccination will be more widespread," he said as reported by Bernama.
According to Harker, however, the vaccination movement in the United States is ‘so far very disappointing’.
"Less than five million people have received the first dose of the vaccine - less than two percent of our population," he said.
Harker also said that the US $ 900 million aid package approved by Congress recently will help boost the US economy, when it 'starts to look more normal' in the second half of 2021.
"Gross Domestic Product (GDP) growth should be strong in the second half of this year and until 2022, before contracting slightly in 2023," he said.
Harker made the statement as the U.S. economic recovery lost momentum following the surge in new Covid-19 cases nationwide in recent months.
"Although the number of infections and deaths decreased during the warmer months, cases have increased since September. The death toll was higher than during the first wave of Covid-19 last spring, "added Harker.
According to Johns Hopkins University, U.S. Covid-19 deaths exceeded 364,000 yesterday afternoon, with a total of 21.4 million national cases.
