GLOBAL RECESSION ECONOMY

GDP WHAT IS RECESSION ? UNEMPLYOMENT

Before, understanding Recession” we need to understand the market economy TWO STAGES OF MARKET ECONOMY TWO FACTORS OF MARKET - DEMAND & SUPPLY

TWO STAGES OF MARKET ECONOMY Growing Market Economy Declining Market Economy

Starting Point = Willingness to buy Growing Market Economy

Declining Market Economy Starting Point = Unwillingness to buy

Demand is the price at which consumer is ready to buy and producer is ready to sell TWO FACTORS OF MARKET:- DEMAND & SUPPLY Producer Price Consumer Price ProducerHigh Demand Consumer Low Cost

Recession is the economy shrinking for two consecutive quarters ( 6 months) with a decrease in GDP (Gross Domestic Product) A recession is defined to be a period of two quarters of negative GDP growth. RECESSION - DEFINITION

There is a joke that economists quote to explain the Difference between “Recession & Depression” RECESSION “WHEN YOUR NEIGHBOR LOSES HIS JOB” DEPRESSION “ WHEN YOU LOSE YOUR JOB “

OTHER INDICATORS : What is Recession? Unemployment Rate Consumption Rate Actual Personal Income

OVER PRODUCTION LOW CONFIDENCE LEVEL Why Recession happens?

OVER PRODUCTION A situation in which the supply exceeds the nation’s ability to consume what has been produced LOW CONFIDENCE LEVEL Consumers are fearing that they may lose their jobs. So, they have less confidence to spend money and buy Goods. This will result in reduction in demand in the market. Consumers start saving money instead of spending Money. This is a downward spiral in the economy.

Indicators to say a nation is in recession Low GDP Decrease in factory production Growing unemployment Slump in personal income An unhealthy stock market

It is unhealthy for any nation to be in Recession; So, Government will take certain countermeasures to eliminate or reduce the Effect of recession for turn around; Market Economy How to come out of recession?. Consumers Can decide to buy or not Producers Can produce and sell at their prices

Government does not have direct control on Producers’ & the Consumers’ behavior. They can influence millions of Producers & Consumers with Government’s policies. How to come out of recession? Fiscal Policies By (Govt.) Government influences the economy by changing how it (Government) spends and collects money Monetary Policies (By RBI) RBI manipulates the available supply of money in the country Government has 2 plans

IMPACT OF GLOBAL RECESSION ON INDIA

Indian companies have major outsourcing deals from the US. India’s exports to US have also grown substantially over the years. Outsourcing More people have sold the shares in the Indian share market than they bought in the recent weeks. This has added to the fall of sensex to lower points. Stocks

HOPING THIS TIME RECESSION VANISHES SOON SO THAT INDIA GETS BACK TO ITS STRONGER GDP GROWTH RATE OF 8% TO 10% (THOUGH THE EXPERTS SAY IT WILL LAST TILL Q3 OF 2009)

Comments ! Questions ? Suggestions.