recession - Copy.ppt [Autosaved]

8/7/2019 recession - Copy.ppt [Autosaved]

1/21


2/21

Before, understanding Recession,we need to understand the market

economy;

A] TWO STAGES OF MARKET ECONOMY

B] TWO FACTORS OF MARKET; - DEMAND & SUPPLY


3/21

A1] Growing Market Economy

A2] Declining Market Economy

A] TWO STAGES OF MARKET ECONOMY


4/21

A1] Growing Market Economy

Starting Point = Willingness to buy


5/21

A2] Declining Market Economy

Starting Point = Unwillingness to buy


6/21

Recession is the economy shrinking for two

consecutive quarters (=6 months) with a

decrease in the GDP (=Gross Domestic Product)

GDP = Value of all the reported goods and services

produced by the people operating in the country

C] What is Recession?

GDP = MONEY VALUE OF {C + I + G + (X M)}

C = Consumables, I = Gross Investments, G = Government Spending,

X = Exports, M = Imports


7/21

5(&(66,21

:+(1


8/21

GDP is a good indicator of economy; Otherindicators could be;

-Unemployment Rate

-Consumption Rate

-Actual Personal Income-Etc..

If GDP is growing, then market is growing due to

increased demand;


9/21


10/21

Effects on India

Due to recession air India had a loss ofRs.50

billion in 2008-09

Imports dipped by more than 39% Indias engineering exports dropped by more

than 25% as orders from Europe and U.S

declined due to recession.

Engineering sector depends on the U.S and

European market for over 40% ofits revenue.


11/21

Contd.

Indias textiles and clothing exports to the U.S

declined by over 14% at $1.7 billion in the first

four month of2009.

Indias export had fallen more than 30%

continuously for more than 18 months.

An estimated 1.5 lakh indian workers had

come back home from the UAE due to

economic crisis.


12/21

Contd.

Sectors like textile,gems,jewellery,handicrafts

and leather had been worst hit.

The Indian IT enabled service industry grew at10% which is lowest in last 5 years.

Around 1.3 million people in Indian export

industry lost their jobs.


13/21


14/21

china

32% ofChinese Exports go to the US.

Therefore US recession adversely affected the

Chinese manufacturing industry.

Majority ofchinese workers are engaged in

manufacturing sector,therefore there were

high amount ofjob cuts.

GDP ofchina came down to around 7% from

11%


15/21

Contd.

Chinese producers oflow-end goods such as

toys and textiles had struggled.

sales of

higher-end machinery and electronicsdeclined as the U.S. economy had slumped.


16/21


17/21

What India and china did?

China's leaders doled out 4 trillion Yuan

($584 billion) stimulus package.

Indian government doled out Rs.1lac crore asstimulus package.

In both the countries banks did not give loans

without taking collateral.


18/21


19/21

KAL AAJ OR..KAL

India and china would not impacted largely by

the US recession, simply because India and

china are not what they was in the '80s-'90s

Beliefin ourselves and in management

thought.

Willingness to compete with developed

economies.

Learned from the past


20/21

Strengths

Domestic demand.

Public sector.

Savings.

Strict measures by the banks.


21/21

Thank you.

Documents

recession - Copy.ppt [Autosaved]