COVID-19: When might we see a recovery?

AZ Business Magazine | AZBigMedia

Given the high uncertainty on how the epidemiological trajectory of COVID-19 and the economic response to this crisis will develop over the next few months, The Conference Board has developed three scenarios for the development and recovery of the U.S. economy through the remainder of 2020.

According to The Conference Board’s analysis, the first scenario (a May Reboot or “quick recovery”), assumes a peak in new COVID-19 cases by mid-April, with economic activity gradually resuming in May. In the second scenario (a Summertime V-Shape, or “deeper contraction, bigger recovery”), the peak in new cases will be higher and delayed until May, creating a larger economic contraction in Q2, but also a stronger recovery in Q3. In the third scenario (a Fall Recovery or “extended contraction”), a managed control of the outbreak helps to flatten the curve of new COVID-19 cases, and stretches the economic impact across Q2 and Q3, with growth resuming in September. 

“The impact on the economy is different across the three scenarios,” says Bart van Ark, Chief Economist of The Conference Board. “In our most optimistic scenario, the economy will shrink to 1.6 percent in 2020 compared to 2019. However, the contraction will be much stronger under the Summertime V-shape (5.5 percent) and the Fall Recovery (6 percent) scenarios. Businesses should prepare for those worst-case scenarios, given their high probability of occurring.”

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