I firmly believe that after comparing Nasdaq all-time high levels and Nifty levels, Nasdaq has dropped from 18,671 levels to 16,776 levels due to recession fear, even European countries are experiencing recession fear and markets are collapsing, even Nikkei we saw downtrend, where else if we compare the same with Nifty we are near all-time highs despite recession fears, and I believe FII has pulled there money from US and European markets and will start pumping in emerging markets.
Understanding the causes, effects, and avoidance of recessions
The world is experiencing many challenges in the wake of 2019 Covid. Life before and after COVID has undergone a significant transformation. The World is dealing with two blows at once. Different nations are experiencing problems with their economies and health. Many nations develop and put into practice various measures to restore order and get the economy back on track.
The majority of developed nations, however, are expected to experience a recession, according to a recent survey. The US, the UK, New Zealand, the Philippines, China, etc., could experience a recession in the upcoming year. The survey did state, however, that there is essentially no danger of a recession in India. After breaking through the barrier of 80 Rupees to the dollar, India's currency has experienced an all-time low. However, Bloomberg research stated that there are very few odds of a recession in India. According to the analysis, India's chances of entering a recession are virtually negligible, but wealthy nations and continents like the United States, the United Kingdom, New Zealand, and a few other European nations will be at risk.
How the Indian economy is robust
Everyone is aware that the US economy is the mother of all economies and that almost every other country's economy is dependent on it. This is due to the fact that the us dollars is the primary trading currency worldwide. Additionally, the United States, a developed nation, has a significant impact on global trade in terms of the provision of goods and services.
But the world is moving toward a new ecosystem right now. The center of global power is evolving. Today, the economies of all nations function independently. The risk of recession is currently very high for industrialized nations, but in this environment, India's economy is doing well and is on track to reach $5 trillion in GDP. When the COVID-19 pandemic destroyed India's economy, the Indian government and RBI, the nation's central bank, made many wise choices. As a result, India performs quite well and is moving toward reaching its goal of a $5 trillion GDP while the rest of the world is struggling and heading into a recession. The Indian economy is anticipated to reach a size of $4.7 trillion in 2024 and $5 trillion by 2026, according to the IMF.
Recession Probabilities by Country
The chance of an Asian recession is 20–25%, according to the most recent Bloomberg Report. The likelihood of a recession in Sri Lanka is 85%, despite the country being on the point of bankruptcy. If the US government doesn't take action as a whole, developed nations like the USA risk entering a recession. Current year, there is a 40% risk that the United States will experience a recession. The Russia-Ukraine War is the primary cause of the recession, which is expected to affect Europe with a likelihood of 55%.
Few other nations, including New Zealand, Taiwan, Australia, and the Philippines, are at a 33%, 20%, 20%, and 8% probability of recession, respectively. Japan and South Korea are also at risk of going into recession. There is a 25% possibility that one of them will experience a recession. A recession in Pakistan is 20% likely.
Recession: What Is It?
A recession in the economy is a phase of the business cycle marked by a slowdown or contraction of all business and economic activity. Although there is no strict guideline or precise definition for what constitutes a recession, officially a country is considered to be in one of two out of the last three-quarters of its economy in the red. There are several reasons why a recession occurs, including the following: financial crisis, economic crisis, the crisis in foreign trade, economic bubble, natural disaster, health risks, excessive external and domestic debt, etc.
What are the Recession's Causes?
Recessions always have different causes in different nations and economies. It is by no means required that the cause be the same in every circumstance. It could occur for a variety of reasons.
Among them are:
Less spending by the public and the government
Higher rates of interest
Stock market collapse
Decreased industrial production
Poor economic management
War disruptions
A credit crunch
Unnatural Disaster of Deflation
Mis Debt management, etc.
What Effects Does a Recession Have?
A recession causes a lot of losses to an economy, to put it simply. Higher unemployment, decreased purchasing power, lower earnings and income, decreased chances for private investment and education, and higher unemployment is all effects of the recession that cause economic losses.
India's history of a recession
There is no clear definition of recession. Recession is defined differently by several international financial institutions. However, a widely accepted definition is that a country is technically in a recession if its overall economic activity declines for two consecutive quarters. Previously, after gaining its independence, India experienced numerous recessions for a variety of causes, but it always recovered and reached new heights. 1958, 1966, 1973, 1988, 2000, 2008, and 2020 fiscal years. India experienced a recession in each of these years, and each time the cause was distinct and new.
The Biggest Recessions in World History
YEAR OF RECESSION
The Own Goal Recession of 1938
The V-Day Recession of 1945
1948 Post-war slump
Investment Bust Recession of 1957
Oil Embargo Recession of 1973
Gulf War Recession of 1991
Dot-bomb Recession of 2000
Great Recession of 2007
Covid 19 Recession 2020