WHAT IS A RECESSION PERIOD?
According to our modern economics, a recession period is one which is generalised as a form of business cycle contraction when there is a general deficiency or declining nature in many economic activities. In other words it can also be defined as a negative economic growth for two back to back or consecutive quarters.
SOME KEY POINTS OF RECESSION PERIOD
- A recession is a significant decline in economic activity and according to many economic experts this period can last more then few months or more(unexpectedly).
- In modern business, a recession is the period which lies between the peak period and the trough period.
- Often it comes to knowledge that an economic recession is one which indicates a negative GDP growth.
- The 2008 recession was the all time biggest US economic downturn since the Great Depression period.
RECESSION PERIOD INDICATOR
- During a recession period, a whole quarter of negative growth can arise, and it’s followed by both positive and negative growth in several quarters.
- Recession sometimes depends upon the Yield Curve. A yield curve is simply the interest rate on a bond or treasury.
- Confidence Index can also indicate a recession period. The tit-for-tat nature of the trade war has firms feeling uncertain about the future of the economy. As an example the 2018 conflict between U.S & China .In that scenario 25% tariffs took effect on $50 billion worth goods.
- A recession means basically that the economy further isn’t growing and the barometer of economic growth is a measure called GDP. A downgrading GDP indicates a future recession time.
- A downfall in the manufacturing department can cause a severe damage in economy and cause a recession period.
HOW A RECESSION CAN AFFECT EVERYONE?
- A recession period is destructive and it produces a huge amount of barriers for every individual in terms of survival.
- It creates a wide and long lasting spread in unemployment sector.
- As the unemployment increase consumer’s purchase on regular basis falls as these two are inversely proportional to each other.
- Many huge businesses can go bankrupt.
- It’s also seen in many studies that many people loose their shelters as they become unable to afford mortgage payments.
- You and educated peoples can’t find a job because of this recession and that’sa major set for their career.
FROM RECESSION TO DEPRESSION
A recession can turn into a depression if it lasts for more time,then that of the expected time in a recession period the whole economy contracts for two or more quarters, whereas a depression period can last long for many years and it can destroy a whole country with finishing it’s existence in the world economy graph. In the last Great Recession of 1929-1939 unemployment rate rose upto 25.59%. So in order to stay strong and avoid this recession and depression period a country needs to understand the market and work according to the palns given by economic experts of the County.
RECESSION AFTER COVID-19
- Before the COVID-19 outbreak in the world, the world economy was facing a 3D challenge or in other words triple challenge consisting of demographics,debt & disinflation, and now it will be more difficult to overcome this tragic as well as tricky situation.
- It’s expected that a huge number of active workers in different sectors over the world and it will seriously hamper the growth of economy along with a downgrade in the buy and sell curve.
- The share market will face a terrible loss and it is expected that after this COVID-19 pandemic the situation will become more worse and the share market curve which is generally known as Stock Exchange Index will become more steeper then that of the curve of 2008(During the Great Recession).
- It’s expected that the real GDP growth will grow at about a pace of 0.6% & it’s to weak to keep the growth of unemployment rate down.
- According to WHO more worse is yet to come & that means the GDP growth can fall below 0.6%.
- All the upcoming events are expected to be postponed and the revenue generation will become too slow to mention.
- People can commit suicide due to lack of employment and it’s the worst phase one have ever seen.
POSITIVE OUTCOME OF RECESSION
- This recession period can cure inflation in a way.
- The federal reserve must always stay balanced between slowing the economy enough to prevent inflation without triggering the recession.
- A group of economists says if a country overcomes a recession period faster then the expected time,then it’s possible that the country’s GDP rate will raise in upward direction in such a way that it will be too strong to tackle any further recession period in future.
- If a country becomes able to to that ,then the unemployment rate will start lowering down and it’s positive for a country.
- It’s expected that Europe counties will face the worst part of this recession and in Asia , India & China will Stay barely touched by this recession period.