Recession

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Recession

• Understanding the Basics
• By
• ManiBhushan Tiwari

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Lets Hear A Story
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Definition

• A recession is defined as a decline in countries
  GDP growth for two or more consecutive quarters
  of a year.
• Recession is also preceded by several quarters of
  slowdown.

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Causes Of Recession

• A recession commonly takes place when consumer
  lose confidence in the growth of economy and
  spends less.

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Effect Of Recession

• This leads to a decreased demand for goods and
  services, which in turn leads to a decrease in
  production, lay-offs and a sharp rise in
  unemployment.
• Investors spend less as they fear stocks values
  will fall and thus stock markets fall on negative
  sentiment.

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The big Question ? ? ?

• IS INDIA INTO RECESSION

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Discussion Continues

• The truth is, Indian economy is also facing a
  kind of slowdown. The prime reason being, world
  trade does not functions in isolation. All the
  economies are interlinked to each other and any
  major fluctuation in trade balance and economic
  conditions causes numerous problems for all other
  economies.

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Where Did The Problem Started ?

• Appreciation of Rupee
• Rising prices of Oil and inflation
• The sub-prime crises in the US, the fall of stock
  market, the Satyam saga.

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Current Situation

• IT industries, financial sectors, real estate
  owners, car industry, investment banking and
  other industries as well are confronting heavy
  loss due to the fall down of global economy.
• global recession, inventories industries like
  garment, gems, textiles, chemicals and jewellery
  had cut production by 10 per cent to 50 per cent.

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What lies Ahead

• Indian companies have major outsourcing deals
  from the US.
• India's exports to the US have also grown
  substantially over the years.
• The India economy is likely to lose between 1 to
  2 percentage points in GDP growth in the next
  fiscal year.
• Indian companies with big tickets deals in the
  US would see their profit margins shrinking.

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Continue

• The worries for exporters will grow as rupee
  strengthens further against the dollar.
• But experts note that the long-term prospects
  for India are stable.
• A weak dollar could bring more foreign money to
  Indian markets.
• We should prepare ourselves for lower growth
  rates, and slowdown in the services sector
  growth, over the next few years.

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Measures to be Taken

• Tax cuts
• Hike in government spending
• Reducing the unrealistic prices of property
• The falling rupees against the dollar will bring
  a boost in the export industry.
• The oil prices decline will also have a positive
  impact on the importers.

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• THANK YOU

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