Citi CIO Says Modeling Suggests 'It Takes Nine Quarters' for Economy to Get Back to Where It Was Before Coronavirus

David Bailin, the chief investment officer of Citi Private Bank, cautioned that the economic recovery from the fallout of the coronavirus pandemic could take a significant amount of time, pointing to modeling that suggests it could take "nine quarters."

The bank executive made the projection in a Thursday morning interview with CNBC's Squawk Box. During the segment, Bailin weighed in with his perspective on how long the economic downturn could last.

"We're talking about a period of time between now and when that vaccine becomes widely available, and that could be anywhere from 18 to 24 months," Bailin said. "And between now and then, we actually don't have effective treatments for the disease, and therefore all of the testing and tracking that people have been talking about today is absolutely essential for us to begin to turn the economy back on."

“We recently ran a model looking at this data and it looks to us that it takes 9 quarters for us to get back to where we were in the first quarter of this year in terms of GDP. It’s quite a bit of runway between here and there,” says Citi’s David Bailin. pic.twitter.com/TXm3efAvZx

— Squawk Box (@SquawkCNBC) April 16, 2020

He noted that Citi Private Bank anticipates an unemployment rate of 20 to 25 percent in the coming months. "The question is, how fast does that come back," the executive noted.

"We recently ran a model looking at this data, and it looks to us that it takes nine quarters for us to get back to where we were in the first quarter of this year in terms of GDP [gross domestic product]. It's quite a bit of runway between here and there," Bailin explained.

The latest jobs report released Thursday from the Department of Labor, which was for the week ending April 11, showed that an additional 5.2 million workers had applied for unemployment in the past seven days. That brings the four-week total to a massive 22 million, which analysts estimate brings the national unemployment rate to about 15 percent. During the Great Recession, unemployment peaked at 9.9 percent in 2009.

And analysts expect unemployment to increase further.

"Things may get exponentially worse. If the virus were to continue throughout the summer or come back next year, those numbers would hit one-third of the global workforce," Michael Monderer, Stratfor's senior analyst for global economics, said in an email to Newsweek.

"It's not out of the question that the U.S. unemployment rate could go to over 20 or 30 percent. Those numbers are people. We've never had a downturn this sharp and this fast. Even the Great Depression, with unemployment of about 25 percent, took four years to develop," Moderer explained.

Wall Street
A view of the Fearless Girl statue in front of the New York Stock Exchange on Wall Street during the coronavirus pandemic on April 15 in New York City Noam Galai/Getty

A coalition of governors around the country are working on developing a plan for reopening the economy after the number of new cases of coronavirus and the death toll from the virus decline significantly. While "stay-at-home" and "shelter-in-place" measures have been extended into May or even June in many parts of the county, lawmakers are looking at ways to safely restart the economy moving forward.

Health experts and economists have cautioned that this will require significantly expanding testing, as well as implementing tracking capabilities, in an effort to isolate those infected with the virus. Thus far, the federal government has been slow to roll out large-scale testing.

As of early Thursday afternoon, there were about 630,000 confirmed cases of the coronavirus in the U.S., according to a tracker updated by Johns Hopkins University. Of those, over 26,700 have died while more than 47,700 have already recovered