Economic situation may have been quite different ten years ago but former finance minister Pranab Mukherjee's remarks at US-India CEO Forum way back in June, 2010 comes handy to describe the economic uncertainty we are now in. He had said then,"Economists used to tell us last year that the global economy will make a V-shaped recovery... Recently, with the risk of new crises, experts are saying that it may be a W-shaped recovery. Frankly, I’m beginning to feel that for every alphabet in the English dictionary, there is a theory of economic recovery. What so many competing theories of recovery mean is that we really do not know the answer."

       Basically, a V-shaped recovery means that there’s a sharp upturn after a quick decline, a ‘U-shaped’ recovery implies there could be months, even years, between decline and recovery. A 'W-shaped’ recovery, which is also called a ‘double dip’, means the economy picks-up only to fall again and then starts rising, while an L-shaped recovery is characterized by a slow rate of recovery, with persistent unemployment and stagnant economic growth..

       And finally a ‘K-shaped’ recovery is a situation where there’s a sharp divergence between different strata of the society.

       Coming to the current financial year, the shape that the economic recovery is taking depends on the context that we are looking at. While the finance ministry believes that the recovery is V-shaped, most economists don't think so.

       If one looks at year-on-year growth, the recovery is obviously V-shaped after Q1, FY'22 yielded 20 per cent economic expansion. However, a low base of 24 per cent contraction in the gross domestic product (GDP) during Q1 of the previous financial year fetched this statistical illusion. The growth did not capture the huge disruption caused by the second Covid wave as GDP during April-June, of FY'22 was still 9.2 per cent lower than Q1 of 2019-20 or a pre-covid period. Besides, it was 16.9 per cent less sequentially compared to Q4 of the previous financial year

       If one looks at quarter-on-quarter growth, the recovery seems to be taking W-shape, provided the coming quarters see growth. However, quarter-on-quarter generally yields GDP contraction in Q1 as the size of the economy is higher in the previous quarter.

       When growth is seen in the context of seasonally adjusted quarter-on-quarter, the growth again seems to be W-shaped, if the growth comes in the next quarters. This is the most appropriate measure in the current times.