K-shaped Recovery

K-shaped Recovery

Subject – Economy

Context – Income of poorest fifth plunged 53% in 5 years; those at top surged. This stark K-shaped recovery emerges in the latest round of ICE360 Survey 2021, conducted by People’s Research on India’s Consumer Economy (PRICE), a Mumbai- based think-tank.

Concept –

• A K-shaped recovery occurs when an economy recuperates unevenly, and there’s a separate trajectory for two segments of the society.
• While the financial markets recover and grow, the real economy, or the flow of goods and services, gets worse.
• That’s worrying, because 84% of the stock market is owned by 10% of households. While the market continued to rise even amid a global pandemic, GDP and employment rates fell.
• These different paths follow the direction of the two spokes that poke out from the
• The two prongs can also represent: people with high and low wage levels, those that have the ability to work from home and those who don’t, and those who have liquid wealth assets to survive during the recession and those who don’t. It’s very much a split of the ‘haves’ and the ‘have-nots’.

To know about Different types of Economic Recoveries, please refer September 2021 DPN.