The economy will likely see a significant decline in growth in 2020 and a modest recovery in 2021, CUNA Senior Economist Jordan van Rijn says in CUNA’s latest Economic Update video. The video contains insights on data, including CUNA’s April Monthly Credit Union Estimates, on how the pandemic is affecting credit unions.

Van Rijn notes that economists, like epidemiologists, are currently operating on assumptions, but that a great deal of uncertainty remains.

“One of of the main assumptions is that the virus will continue to recede as we go throughout the year. Dr. [Anthony] Fauci, [director of the National Institute of Allergy and Infectious Diseases] and other experts do predict it will come back to some degree in the fall and winter months, and we do include that in our forecast,” he said. “However, we expect expanded testing and other preventative measures to lessen the impact of that rebound, so we don’t expect it to be quite as bad as in the second quarter.”

Regarding the economy, van Rijn said he expects continued aggressive monetary and fiscal action, including the Fed keeping long- and short-term interest rates very low.

Data from the first quarter of 2020 shows declines in growth in almost all loan categories, particularly in credit cards, other unsecured loans, new auto loans, home equity lines of credit/second mortgages and commercial loans. However, first mortgage growth has grown dramatically, driven by low long-term interest rates. “Credit unions are continuing to find ways to do mortgages, particularly in this environment of extremely low interest rates,” van Rijn said. “A lot of people are asking for mortgages and we’re seeing a lot of refinancing as well, including a lot of people coming from banks to get a refinance from a credit union.”

The complete video can be found below, and the slide show presentation on CUNA’s Economic Update webpage.