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Early hopes of a rapid, V-shaped recovery—a deep drop but
swift pickup of growth in Q3—have been dashed world-wide. Most CEOs around
the globe believe the economic recovery will be slow, and it could take
considerable time before output recovers to prepandemic levels. In China,
Europe, and the US, between 42 and 55 percent of CEOs envision a U-shaped
pattern: partial shutdown measures control localized outbreaks with countries
gradually succeeding in managing the pandemic. Growth would be sluggish and
wouldn’t reach prepandemic levels until the final quarter of 2020. Other
CEOs, especially those in Japan and the US, envision a W-shaped scenario: the
continued risk of new outbreaks and a second resurgence of the virus lead to
more stringent containment measures and a new contraction of output during
the second half of the year. Output would see another drop in the second half
of 2020, and any further recovery will be put off until well into 2021.
A smaller but significant number of CEOs in China, Europe, and the US
envision an L-shaped recovery: growth would not resume until 2021. A near
majority of CEOs in Japan and more than half in the Gulf Region share this
pessimistic view. For business leaders in the Gulf region, the challenges of
volatile oil prices and the long-term viability of petroleum-based growth
models play an important role. China is an exception—the economy there
already took its biggest hit during the initial virus outbreak in February
and March. Some strong recovery already took place in the second quarter, and
nearly one quarter of CEOs in China presume a continuation of this V-shaped
growth recovery. Nevertheless, 43 percent of CEO in China share the more
pessimistic view of their global peers that recovery will be more gradual and
U-shaped.
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