Page 68 - IBT October 2020

begin recovering until the end
of 2020 or even mid 2021.
There are a few reasons this
could happen. First, if it takes
longer to get the surge in
coronavirus cases under
control, it could delay when a
country can begin reopening
their economy.
Secondly, if many businesses
end up going bankrupt during
the period of economic
shutdown or are otherwise
unable to reopen, there will be
fewer jobs thus, creating more
economic dislocation. Finally,
V Shaped consumers might not be ready
Recovery: Steep to start spending when things
Decline but Quick reopen, especially if they are
Recovery still scared to go out or they do
A V-shaped recession and not get enough financial
assistance.
subsequent economic recovery
is all about speed and
sharpness. As the below L-Shaped
example shows [insert a Recovery: An
V-shaped graph here], there Extended
can be a sharp contraction in Downturn
the economy before it This is the worst-case scenario.
experiences an equally sharp It also goes by another name:
recovery to pre-recession "depression". It is when an
levels. This is treated as the economy experiences a deep
best-case scenario for any recession and does not recover
economy that enters a to its previous rate of growth
recession as it quickly for several years, if ever. The
recovers without any official recession may end
complications. within a few quarters, but the
‘V’ shaped recovery is the new recovery to a pre-recession level
‘it’ word after US, President U-Shaped of economic output may take
Trump used it in one of his Recovery: Long years.
speeches to badly describe the Decline and Slow If everything goes wrong in economies – the other being people. The private sector needs to a number of countries, remains a
post-covid scenario for the US Recovery dealing with the COVID-19 Vietnam – to register a positive have their own standard operating concern for Bangladesh and
economy. To quote the crisis, there is the potential for growth in 2020, despite a global procedures to recover from the countries around the world.
president, “We are opening up This is similar to a V-shaped an L-shaped recession. This recession which is shaping up to shocks. IMF is still expecting a pick-up in
with a bang and we have been recession but lasts longer. In could happen if we cannot be historic in scale. A forward-looking response to activity toward the end of 2020
taking about a ‘V’. A ‘V’ is this scenario GDP (Gross control coronavirus outbreaks, In fact, a V-shape recovery curve COVID-19 is crucial if Bangladesh and in 2021 for Bangladesh, with
wonderful.” Domestic Product) typically which would result in repetition across the world is a possibility as is to recover quickly from the growth climbing back to around 6
The President is indeed correct shrinks for several quarters in a of shutdowns and sluggish initially governments have taken economic shock and setback of the percent. Of course, that depends
about ‘V’ shaped recovery row, and only crawls back to growth, if not outright up unprecedented monetary and pandemic. A well designed on the domestic economy starting
being ‘wonderful’ since it the level of growth seen before stagnation. fiscal measures to face an COVID-19 crisis response should to recover. But there is so much
assumes that all losses that the downturn. In a U-shaped unprecedented crisis induced by be designed to help Bangladesh uncertainty and it is very difficult
were made would be soon recession, it takes many the Covid-19 pandemic. look beyond recovery, towards to ascertain with precision the
recovered. For the COVID-19 months, if not years, for the Can Bangladesh But to go back to pre-Covid growth 2030, making choices and recovery’s speed or extent.
recession to be V-shaped, economy to recover. The long, Score A ‘V’? rate would require much more managing complexity and However with Bangladesh having
there needs to be enough flat stretch of sideways growth Edward Lee, Chief economist of than a large influx of cash. uncertainty in four main areas: such strong growth rates before
coronavirus testing so that comprises the bottom of the U Standard Chartered for ASEAN Effective and timely disposal of governance and agency, social the pandemic, IMF still expects
people could safely go back to shape. and South Asia, believes there fiscal commitments, by the protection, green economy, and that the country would quickly
work without creating another If COVID-19 causes a longer, is still a possibility of government particularly smooth digital disruption. come back to previous growth
surge in cases, and effectively U-shaped recovery, that could Bangladesh being one of only disbursement of fiscal stimulus, But the possibility of a second rates, if global economic
treat existing cases. mean the economy wouldn’t two ASEAN and South Asian will instill confidence in the wave of infection, already seen in conditions are supportive.

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