🕶️ 🧛🏿 🌞 Reuters: 5 possible scenarios for economic recovery after a coronavirus pandemic 👨🏼‍💻 😦 🕠

Reuters interviewed more than 50 economists, asking them what the economic recovery might look like after the completion of the main wave of the COVID-19 pandemic. Will the recovery schedule resemble the English letter U, V, or maybe W?

In our new material - the main points of all the hypotheses presented.

First question: how strong will the fall be?

There are different forecasts regarding a fall in the global economy: from a fall of 6% in 2020 to an increase of 0.7%. On average, experts predict a 1.2% drop.

Accurate predictions are hindered by the uniqueness of the situation - from a fully working 100% economy, we came to its massive stop in just a few weeks. Here is the form in which the timetable for overcoming this situation can take.

1. Latin V: rapid decline and growth

Proponents of this scenario suggest that a sharp decline will be followed by an equally rapid increase almost to pre-crisis levels.

According to some economists, after a large-scale decline in world GDP this summer, in the fall, stimulus measures by authorities around the world can lead to a rapid economic recovery.

The opening of businesses and the restoration of business activity can lead to tangible results already in the 3-4 quarter of 2020.

2. U-chart: fall, stagnation and active growth

In this scenario, recovery will take longer than a couple of blocks. In this case, the crisis will be more similar to the situation of 2008-09. Most of the economists surveyed adhere to this theory.

Exit from quarantine will be smooth, which will affect the speed of restarting the economy. Moreover, many industries will recover more slowly - for example, tourism.

3. W: recovery and the second wave of crisis

This is the so-called “double fall scenario”: facilitating lockdown measures will bring revitalization to the economy, but the crisis will not go anywhere. During quarantine many enterprises and businesses will go bankrupt, unemployment will increase. The likelihood of a second wave of the epidemic closer to autumn also remains - it can be triggered by the abolition of quarantine measures.

4. L: protracted crisis

This scenario does not imply a quick recovery, or at least a transition to economic growth. This scenario can be realized if the coronavirus pandemic cannot be defeated in the coming months. In this case, the lockdowns around the world will continue, and if they are canceled, repeated bursts of incidence may occur.

However, the likelihood of such a negative development of events is still not very high. This is evidenced by the experience of Wuhan, a city that has become the first epicenter of the epidemic, which is now gradually returning to normal.

Nevertheless, the L-recovery schedule can still be implemented for individual global economies. At risk are countries where it is difficult for authorities to properly stimulate the economy, while relying on resource exports

5. Alternative

According to Bloomberg, many economists are gradually losing faith in the implementation of the scenario with a V-shaped schedule for the recovery of the global economy. Instead, they suggest a restoration in a torn rhythm. As a result, this schedule will not be in the form of a letter V, U or L. Here is how the experts at Deutsche Bank see this schedule:

Such a schedule implies a gradual decline, and then recovery in several jerks - this will be facilitated by gradually easing quarantine measures. Also, the situation will be affected by a decrease in demand in the economy, as people will save more. Such a recovery scenario is one of the most likely.

Read reviews, market analytics and investment ideas in the ITI Capital Telegram channel

Reuters: 5 possible scenarios for economic recovery after a coronavirus pandemic