Economy
May 7, 2020
CRU: V U L—Demystifying Recession Shapes
Written by Jumana Saleheen
By CRU Chief Economist Jumana Saleheen, from CRU’s Global Steel Trade Service
Many are still discussing what type of recession will ensue following the Covid-19 pandemic. Will it be U-, V- or L-shaped? Different people may refer to the same shape to mean different outcomes. To bring clarity to this issue, this insight sets out the standard economic definition of each type of recession. The pandemic is forecast to give rise to different shaped recessions in different countries. For the world economy, we forecast a U-shaped recession—defined as a permanent loss in the level of world GDP, but no change in the long-term growth rate of world GDP.
