GLOBAL RECESSION

"A definition of a global recession is

provided by the International Monetary
Fund (IMF). It considers a global
recession to be occurring when the
global growth rate moves below .The
IMF "takes many factors into account,"
not just growth.
Both capital investment and consumer
spending decline during recession.
 IMPACT OF RECESSION
1. Falling stock market
2. Recession in jobs availability
3. Companies following downsizing in the
existing available staff
4. Cutting down of the perks and salary
corrections.
5. Reducing the demand for goods and
services and
6. Declining level of production and
consumption.
 Impact of Global Recession on
Indian Market
1. In the globalized market scenario, the
impact of recession at one place/ industry/
sector peculate down to all the linked
industry and this can be truly interpreted
from the current market situation
2. The badly hit sector at present is being the
financial sector, and major issue being the
"LIQUIDITY Crises" in the market.
3. In-spite of the various measures to
subsidies the impact of the recession and
cut down the inflation present nothing really
sound have been done.
 STEPS TAKEN BY
GOVERNMENT TO CURB THIS
PROBLEM
1. The sudden drying-up of capital inflows
from the FDI which were invested in Indian
stock markets
2. The current step to curb these being
lowering of interest rates and reduction of
PLR
3. RBI will continue to initiate liquidity
measures as long as the current unusually
tight domestic liquidity environment
prevails.
 STEPS TAKEN BY COMPANIES
1. Freezing the recruitment. No new hiring.
2. Fresh graduates or those who are new to
the market will find it difficult to get a job.
3. Last in, First Out.
4. Average performers or difficult employee
will also be shown the door.
 WHAT MORE TO EXPECT?
• Training and Development programs to
freeze.
• Perks, benefits and retention allowances
to be withdrawn
• Bonuses and incentives to be stopped.
• Specialists are out and generalists are in.
 WHO IS AFFECTED ?
1. Stock and FOREX markets,
2. Consumption,
3. Investment and savings,
4. Government spending,
5. Exports and imports.
6. Financial institutions,
7. Corporate sector,
 CONTD.
8. Stock market investors,
9. Housing market,
10. Under 30s, pension or superannuation
funds,
11. Workers
12. Retirees, Exporters,
13. Importers
14. Consumers is considered and evaluated.
 PREVENTION
1. Governing bodies and/or regulators
should be more vigil on the purchase
power of common public.
2. They should be more supportive,
3. Both for helping more people to
attain purchasing power and
4. For retaining the purchasing power
once it is reached.
 CONTD.
5. By automatic acquisition of a fixed
percentage of shares of profit making
institutions,
6. This can be either by social security
measures, or
7. If it controls a considerable meaningful
amount of assets to the financial system,
specifically for generating more jobs and
supporting individuals with income below
some bench marks.
 CONTD.
8. The governing bodies should invest in the
customers than investing in the
producers/suppliers.
9. So the immediate action of the
states/authorities is to enable more people
with financial security and thus providing
them a mind set to involve in more
purchases
10. We need to develop some mechanisms to
automatic restructuring of markets (without
war/armed conflicts) to avoid job cuts and
related miseries.