The Next Normal
We will eventually come out of the current pandemic, but what will the world look like, are we going to go back to the way it was or is the society and economy shaping up for the (new) next normal. The following resources give a view of what the economic recovery could look like (V, U, or L shape as the economists like to call them) and how long will that take to get to pre-pandemic economic numbers.
As the coronavirus continues its march around the world, governments have turned to proven public health measures, such as social distancing, to physically disrupt the contagion. Yet, doing so has severed the flow of goods and people, stalled economies, and is in the process of delivering a global recession. Economic contagion is now spreading as fast as the disease itself.
The coronavirus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy. This article is intended to provide business leaders with a perspective on the evolving situation and implications for their companies. The outbreak is moving quickly, and some of the perspectives in this article may fall rapidly out of date. This article reflects Mckinsey’s perspective as of April 13, 2020. Check this page often for updates.
The following Perspective is based on a speech to internal stakeholders outlining our current thinking on a) The economic forecast and the shape of the business cycle; b) Potential labor market dynamics in relation to recent government policies; c) International experiences on “reopening” the economy; d) Implications for monetary policy and interest rates
Leaders must learn from the pandemic now to position their companies to thrive in the next crisis. Although it is too early to estimate the exact economic impact, it is likely that full recovery of economic activity, including GDP growth, jobs, and unemployment, will take at least a year, and likely much longer.
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