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Know from these signs, whether the economic recession knocks in the country?

Saturday - August 31, 2019 2:35 pm , Category : WTN SPECIAL
Indian Economy in the grip of the global economic recession
Indian Economy in the grip of the global economic recession

The economy itself gives signs of the economic recession!

AUG 31 (WTN) - Discussions of economic slowdown are on full swing in the world including India. According to the economists, the ongoing trade war between the US and China is one of the major causes of the global economic slowdown. From the men's undergarment index to lipstick index indicating that the recession has knocked across the world, including India. But you must be wondering that what are the signs of economic recession? How is it known that the economic slowdown is going on? Today we try to calm all your curiosities.

First of all, for your information, let you know that this is not the first time when the whole world is facing an economic recession, before this time, the whole world had also faced an economic recession in the year 2007-2009. The economic recession of 2007–2009 was the biggest economic crisis since the recession of 1930.

If the growth rate of a country's economy is continuously decreasing every quarter, it is considered a major sign of economic slowdown. For your information, let you know that the growth rate of a country's economy is called the GDP. The growth rate of a country means the pace of growth of the country's economy, or the gross domestic product (GDP).If the growth rate, or GDP will decrease; it is natural that this is an indication that the value of all products and services of that country over a set period is decreasing.

Whenever economic slowdown comes, people tend to consume less. That is, people spend money only on essential goods and services. Sales of homes and vehicles have the greatest negative impact during the recession. Due to the limited income due to the recession, people spend only on essential goods and services, so there is a significant decrease in the sale of houses and vehicles.

It is clear that a person will not spend money on vehicles, when the income is low. When he has extra money, only then he will spend money to buy the car after completing the needs. India has been witnessing a slowdown in the auto sector for a long time, which is clearly a sign of economic slowdown.

As we told you that during an economic recession, people spend money only on items of needs. In such a situation, there is a lot of impact on industrial production. Due to the recession, production starts coming down due to reduced demand, which results in the closure of mills and factories. The decrease in industrial production also affects the business and services associated with it.

The economic recession not only leads to unemployment but also reduces employment opportunities. Due to low demand for goods, there is a negative impact on industrial production due to which the mills and factories either reduce production or they closed. In this situation, either the employees are laid off, or then the employees have lo loss jobs. Due to negative impact on industrial production, the business and services sector related to it alsl have to face unemployment.

In times of recession, it has been observed that savings and investment also decrease. It is natural that when the income is less due to recession, then the person will complete his needs first, only then he will make a decision about saving or investment. The reduction in savings and investment clearly indicates that the recession is going on.

At the same time, demand for loan also starts to decrease during the recession. It is obvious that when people get less money during the recession, then their savings after doing the needful work will also be less. In such a situation, less money is invested by people in banks or other means of investment. When people do not invest in the banks or financial institutions, they will have less money to lend. To strengthen the economy of any country, there should be demand and supply of debt. Therefore, a decline in demand and supply of debt is considered a major sign of recession.

The decline in the stock market is also one of the major indicators of the economic slowdown. As you know, in the stock market, shares of the same companies increase, whose earnings and profits are increasing. If the earnings estimates of companies are continuously falling and they are not able to meet the expectations, then their share prices in the stock market will fall. Falling stock prices of companies will cause a fall in the stock market, which is seen as an economic slowdown.

If investment in the stock market is decreasing, then it is also considered a sign of recession. This is why, because people do not have extra money during the recession, which they can invest in the stock market. Shares in the stock market fall due to reduced investment. That is, a low investment in the stock market gives a clear indication of an economic slowdown.

These are signs that the Indian Economy is in the grip of a recession, from a decline in sales in the auto sector to under-investment in the stock market. Due to the fear of recession, the Modi Government seems to be taking necessary measures to bring the economy back on track. Now it has to be seen how much negative impact the global economic downturn leaves on the Indian Economy, and whether the Modi Government is able to deal with it or not?