RECESSION will BENEFIT India?
The US entered into the technical Recession on 28th July Inflation in the US has broken records over the past 40 years And now many experts believe many countries like UK, Japan, Canada, Australia, and South Korea would also enter into the recession We don't live on mars India too would face some effects Somewhere positive and somewhere negative To solve the whole kink of the recession
INFLATION & RECESSION
Let's discuss some points Let's start with this Blog If Korea is involved in some war Its effects are visible in India Rates of certain products go high This is beyond our reach At that time, due to the Involvement of Korea in wars, prices of products in India went up And today due to the war between Russia and Ukraine Whether it is oil or edible products Prices have increased by 40-50% And this is termed Inflation Inflation is an awful thing I have explained it in a couple of Blogs But still, a small description is necessary What do you mean by Inflation? Earlier the amount of money you had Today you can buy less with that amount This means the value of your money is deteriorating Inflation has three types First, When the government blindly prints currency for its circulation in the market Which would increase the prices of products Second, When Raw material is hard to get or is expensive Which would finally increase the cost of the final product Third, this is very natural Overall the period time, the pay scale of people is raised People can afford a number of things But this also increases the prices of various products Look, Inflammation is a feature of any GDP And it can't vanish Everybody thinks GDP should increase exponentially But this doesn't happen in reality It involves a business cycle The GDP changes like this This means that GDP increases at some point Then inflation would be observed If limited, a Recession would occur Then depression will come And then recovery And growth will be observed again So, a cycle keeps on repeating When inflation becomes uncontrollable in this cycle A recession will be observed in the coming period And now it is very popular A recession is quite dangerous as compared to the inflation It also has got two explanations First is the Technical Recession This means if the GDP of any country has faced consecutive quarters of negative growth rate Then that country entered the technical Recession which can be observed in the US The second explanation is not permanent But some signs can be observed If the prices of products go high and people start losing their jobs Unemployment increases It means the Recession is ahead
How to Prepare for RECESSION
And this can be observed across the globe Now, before we indulge in some bookish explanations First of all, let's understand How should we prepare for the coming recession? How can we save ourselves? The first thing that one should do Save your money as more as you can So that if the recession arrives and you get jobless You are able to sustain yourself for the coming 5-6 months Second thing, If you are planning to buy an iPhone, MacBook, or a car then stop immediately Don't indulge in any huge purchases nowadays Wait and Watch And if the Recession does not come Then you can purchase those things Third, markets are down nowadays And if you know how to invest Which could be beneficial for the long run Start immediately if you have not Because the money which you would save with your long-term Planning Can earn you huge profits in the coming future Fourth and the most important point Don't take any loans these days If already taken, try to repay it as soon as possible Because when inflation is controlled by the government Then the interest rates are increased on the debts So the debt could become more expensive for you The fifth point is, Try to start any side hustle Alongside your regular job Because if you lose your job Then that side hustle could carry you forward The sixth point If you have never bought any insurance Then consider buying any Health insurance, life insurance, or term insurance Because the medical bills are huge in India If anyone falls sick Then the economic condition of the whole family can reach the bottom in no time If we have started talking about insurance So, before understanding the Recession more closely Let's meet our segment sponsor Ditto Ditto insurance is such a platform for the millennials Which has simplified the whole process of insurance Ditto is backed by Zerodha Made by the people who have made the popular Newsletter Finshots Look, the requirements of every person differ in terms of insurance But these advisors Introduce you to the policy which benefits themselves Somehow your phone number reaches them Then they keep on disturbing you Ditto does not do anything like this Honest advice is given on this platform No spam calls are made And you can also book a free consultation call with their advisors Their website is full of educational content And they would also help in the claim settlements So, if you want to take any new policy regarding health or life Or do you want to change or upgrade your existing policy Every detail regarding ditto is provided in the description You can contact them and book a consultation call with them And can get more details about the platform
Why is The RECESSION Coming ?
Have you understood? Now, let's get to know more about the recession What are the reasons and impacts of the coming recession? The reasons are very simple Observe the past two years carefully Look at China Before the Covid-19 Pandemic China and the US were involved in a trade war Due to this Chinese products became expensive in the US And the US prohibited various American countries to work with China Due to these many products become very expensive When the Covid-19 Pandemic arrived China is considered the hub for the global supply chains That supply chain was destroyed And even today the supply of semiconductors is facing the devastating effects Which raised the prices of several products Before the end of the Covid-19 Pandemic Russia and Ukraine ended up in a war crisis Due to this, the prices of edible products reached the sky The whole world depends on these two nations for the supply of wheat and sunflower oil Apart from this the supply of fertilizers also depends on these two countries So, not only food products were impacted But the raw material also became expensive I have explained all these in a Blog The food prices touched the sky The prices of fuel also went high As this is also controlled by Russia Look, we take the fuel lightly But everything moves from one place to another in vehicles which uses fuel When fuel becomes expensive Every item becomes expensive Apart from this, you would have also heard about the printing of currency notes by the US and some European countries in huge countries Which was distributed among the public So the value of money was downgraded The prices of various products went up And inflation broke all the past records And due to this when inflation arrived Then the central banks revised the interest rates immediately The underlying reason behind this was To control the inflation But whenever inflation is controlled Everybody is feared of the flat GDP GDP sometimes faces negative growth And when two consecutive quarters face a negative growth rate We are into the recession
How will RECESSION Impact INDIA
And now the whole world is experiencing it Now the global recession would also impact India But not highly This is believed by many experts Because look at the fuel prices first The increasing rates of fuel introduced the recession The rates are low getting less Cheaper fuel prices will benefit India As we majorly export our fuel Which reduces our forex reserves When the fuel is cheaper Our forex reserve is saved And internally if the prices of fuel go down Then the prices of petrol and diesel would get down Which will reduce the cost of transportation And various products would get cheaper The second benefit would be If we observe internally Then the sentiments of consumers and the market are experiencing growth Currently, Jobs are also increasing in the Auto sector and service sector for the past 2-3 months This is shown by the data made available by IMF IMF has issued a whole chart About the growth of every country till 2023 Although the growth rate of India is quite less But still, they have mentioned that India will be the fastest growing GDP across But there could also be some negative points The first thing is exports All the goods that India exports to the US or other developed countries When these countries will enter the Recession Then those countries might stop importing goods from India This will affect our export level Second, our IT sector could face consequences Whose business is totally based on the services provided to the developed countries If a Recession is observed in those countries Then they would not take our services Which can lead to unemployment in India Third, Startups can Suffer Recently, you might be noticing Many Ed Tech and food delivery startups Have fired many people As they are unable to get adequate investments As many firms are pulling out their investments due to the fear of recession Due to this, the Indian startups are focusing on profitability That's why they have lowered their marketing expenses And have already fired many people
How will RECESSION Impact WORLD
So, this is now clear A global recession would cause both positive and negative impacts on India What would happen across the globe? IMF believes that The growth rate of the whole world would reduce But not highly This could be a shallow recession Because this recession is totally different from the Recession of 2008 The recession of 2008 was a debt-driven recession This means many big companies went bankrupt This would be an excess liquidity-driven recession This means many governments have increased inflation by printing currency notes To control this, the central banks are revising the interest rates Which is triggering a recession Recession will arrive It will be a shallow one But it will impact our lives So, it is mandatory for you to get ready I hope you liked this Blog.