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Global economic downturn
Definition:
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.
Causes:
An economy which grows over a period of time tends to slow down the growth as a
Part of the normal economic cycle. An economy typically expands for 6-10 years and tends to go
Into a recession for about six months to 2 years.
A recession normally takes place when consumers lose confidence 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 in unemployment. Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment.
Impact of a us recession on india:
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. 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. The whole of asia would be hit by a recession as it depends on The us economy. Asia is yet to totally decouple itself (or be independent) from the rest of the World.
Impact of recession in the automobile industry
Global recession has devastated the global auto industry with pinching effects on the
Indian auto industry. India is a strong and growing economy but the hit of recession has put red
Marks on the entire balance sheet of the indian economy.
Among the leading car manufacturers, general motors and ford were the first one...