Recession -By Anmol

8/8/2019 Recession -By Anmol

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RECENT RECESSION

BUSINESS

Presentation by :-

ANMOL BEHAL

(JALANDHAR)


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Definitions

Causes of Recession

U.S. Recession

Past Recessions

Impact on India

Was India ever in Recession

How to fight Recession

Steps taken


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Recession : A recession is a decline in a country's gross domestic product

(GDP) growth for two or more consecutive quarters of a year. A recession is also

preceded by several quarters of slowing down.

Gross domestic product : The total market value of all final goods and services

produced in a country in a given year, equal to total consumer, investment andgovernment spending, plus the value of exports, minus the value of imports.

Consumption is the sum of expenditures by households on durable goods, non-durable goods, and services.

Investment :is the sum of expenditures on capital equipment, inventories, andstructures.

Government spending :is the sum of expenditures by all government bodies ongoods, services and infrastructure.

Net export: is the difference between total exports and total imports


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Graph showing variation of an Economy with Time


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An economy which grows over a period of 6-10 years tends to

slow down the growth as a part of the normal economic cycle for

about six months to 2 years.

A recession normally takes place when consum rs los

confid nce in the growth of the economy and spend less.

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 inunemployment.

Investors spend less as they fear stocks values will fall and thus

stock markets fall on negative sentiment.


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1. The Rate Of Joblessness Assumes Disturbing Proportions.

2. Large Companies Start Giving Depressing Profit Figures.

3. Borrowers Start Defaulting.

4. Credit Card Purchases Shoot Up.

5. Prices Of Essential Commodities Shoots Up.


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6. Companies Stop Filling Vacancies.

7.Prices Of Property And Stocks Come Downdrastically, But Nobody Buys them.

8. The Country's GDP Goes Down.

9 .Savings Are Used For Day-To-Day Expenses.

10 .You Start Worrying About All Of The Above.


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1 ) Banks faced huge shortage of funds and soon

collapsed: As banks kept giving loans and funds at

reasonable terms. At the end of the day, they wereleft with nothing. For example - Merrill Lynch, Lehman

Brothers, CITIGROUP INC

2 ) Jobs are being outsourced to other countries whileAmericans are themselves jobless.


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PAST RECESSIONThe US economy has suffered10 recessions since the end of World War II.

1930-1939 :Decade of high unemployment, low profits, low prices of goods, and high

poverty, specially in 1937 the production declined from 14.3% to 19%.

1982-1983 :Due to a tight monetary policy to control inflation and sharp correction to

overproduction of the previous decade.

1987: lack Monday in October 1987, when a stock market collapse saw the Dow Jones

Industrial Average plunge by 22.6 per cent affecting the lives of millions of Americans.

1990 : The early 1990s saw a collapse of junk bonds and a financial crisis.

2001 : The US saw one of its biggest recessions in 2001, ending ten years of growth, the

longest expansion on record and employment dropped by almost 1.7 million. The economy

also suffered after the 9/11 attacks. Investors' wealth dwindled as technology stock prices

crashed.

2009 : The economy suffered the recent recession in 2009.


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Our economy is shrinking, unemployment rolls are growing,

businesses and families cant get credit and small businesses cant

secure the loans they need to create jobs and get their products to

market, With the stakes this high, we cannot afford to get trapped

in the same old partisan gridlock.


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1. Reduced liquidity in the Indian

economy.

2. Reduced industrial output.

3. Reduced job opportunities.

4. Stock Market is lingering in the

bottom .

5. Real estate market has started to

take a beating.

6. Inflation has increased.7. GDP has come down and the GDP

forecast for the next two quarters are

only average.


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India economy is likely to lose between 1 to 2 percentage points in GDP

growth.

A weak dollarcould bring more foreign money to Indian markets.

10,000 engineers , 5,000 MBAs , 500 designers 2,000 retail sector

professionals 2,500 aviation sectorprofessionals will b unemployed

Lakhs of jobs lost in the last 3 months (in India).

Tata Motors fails to pay vendors, suppliers.

India Incs fundraising via IPO in 2008 dips to 3-yr low.

Truck Sales decline by 65%


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Value of Rupee depreciating as compared to U.S.

Dollar.


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The answer is .

India is not a globalized economy.

India was already facing a huge inflation

problem.

Indias growth is not due to any external

factors.


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A friend will advice to his colleague, Damn, see US and Europe is intorecessions, people are losing jobs and that India guy who studied in IIT and such

a rich fellow. He killed his family and committed suicide because of bad debts.Maybe we should be careful now. If such big countries can have problems, how

soon do you think we will get into trouble like that? Let us be careful now. Whoknows when we will lose our jobs? Let us save now. We can spend when time are

good. Wife will advice her husband, listen, dont buy too much from the stores, ok? We

will manage. I saw TV news about the finance problem. And I heard from mymom that her friends son lost his job. Did you check the share market pointstoday? It was down and in red for the whole day, yesterday. We have enough fornext 2 days. Just buy little , and for the first time she will use the word budget

Let us have a budget from next month, ok ? Sensex & Budget is words which arenew to her dictionary.

Mom will caution her son/daughter (who just joined a firm fresh out of college),Listen, dont go out too much with friends and waste your salary on movies,

clothes or jewels. Manage with what you have. And dont resign or jump jobs.When you get the first salary. Give half to me; I will put in your savings. Dont buy

that bike now. Interest rates are high. Buy it after 6 months .


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The panic button is on and the story goes on.

Media will use the panic to give you more sensational newsfrom abroad and get you more worried. It is cyclic.

We start saving a lot more than we should. Hence, money

gets stagnated.

When you dont buy stuff how are you going to give money

back to the manufactures to produce more? If they dont

have enough to produce, how are they going to pay your

salary? When they dont have enough money to pay your

salary, because of no work getting done, why do you expect

them to pay you for nothing and not ask you to leave?

So, as you see. The story is we get sentimental and extra

cautious when we hear the news around us.


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Govt. should cut down the tax.

Govt should hike its spending to create more jobs.

Boost the manufacturing sectors in the country.

By increasing the export against the initial export.

Can reduce the unrealistic prices of property to bring backthe buyers into the market.

Decline in oilprices will also have a positive impact on the

imp

orters.


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Recession -By Anmol