15 April 2020
Those studying the longer-term economic impact of the Coronacrisis, are grappling with potential scenarios of recovery. Writing for the online shipping magazine Splash247, James Frew from Maritime Strategies International finds that, compared to the 2008 global financial crisis, recession this time round will be far more acute, but has the potential for faster economic recovery, whilst limited oversupply in both the shipping and shipbuilding markets would facilitate a faster rebound should the global economy pull out of its nosedive. He adds that this relatively benign view of the medium-term is subject to gaping downside risks, the most obvious being that efforts to restart economies may lead to a resurgence in the virus, in which case the doom scenario of a 1930s-type protracted recession would become more likely. Similar views are expressed in an article that appeared in Lloyd’s List yesterday, quoting Neel Kashkari, president and chief executive of the Federal Reserve Bank of Minneapolis who said that the unknown path of the virus and the effectiveness of health care to catch up and control the virus will determine how long the shutdown needs to take place. Mr Kashkari said that a V-shaped recovery is hard to see from that perspective and that it would be best to prepare for a worst-case scenario, focusing on an 18-month strategy, both for health care and the economy.