Context:

Various reports predicted that the Indian economy would witness a ‘K-shaped recovery’.

K-shaped recovery

• The “K-shaped” economic recovery, is characterized by a stark split in the recovery pace of the economy— some sectors are bouncing back ahead of the rest at a much faster pace, while others are continuing a downward trajectory.
• K-shaped recovery occurs if different sectors recover at different rates.

Typical economic recoveries

• Typical economic recoveries can include Z, V, U, W, and L:
• V-shaped recovery: A sharp decline followed by rapid recovery, with very little time spent at the trough, or low point, of the recession.
• U-shaped recovery: A steep decline followed by a period of time in which the economy sits at the low point of the recession before finally recovering.
• W-shaped recovery: Also known as a double-dip recession, this is a scenario when the economy experiences a steep decline, followed by a small and temporary recovery and then a second decline.
• L-shaped recovery: A severe recession in which the economy declines and doesn’t recover for years, if ever.