{"id":1001,"date":"2020-04-13T18:25:21","date_gmt":"2020-04-13T12:55:21","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=1001"},"modified":"2020-04-13T19:02:30","modified_gmt":"2020-04-13T13:32:30","slug":"covid19-are-we-staring-at-recession-or-depression","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/covid19-are-we-staring-at-recession-or-depression\/","title":{"rendered":"COVID19: are we staring at recession or depression?"},"content":{"rendered":"\n<p>The Indian economy has been\nreeling since last year and as required, the government did announce a slew of\nrevival measures to tidy the GDP growth rate. But little did we know that the\nlight at the end of the tunnel wasn&#8217;t as close as we thought\u2014it&#8217;s farther. Now\nwe are staring at <a href=\"https:\/\/www.tickertape.in\/blog\/3-investment-ideas-in-recession\/\">recession<\/a>, which some experts say, would worsen and turn into\neconomic depression. Let us understand why we are where we are.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/covid19-are-we-staring-at-recession-or-depression\/#But-first-the-difference-between-recession-and-depression\" title=\"But first, the difference\nbetween recession and depression\">But first, the difference\nbetween recession and depression<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/covid19-are-we-staring-at-recession-or-depression\/#Where-do-we-stand\" title=\"Where do we stand?\">Where do we stand?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/covid19-are-we-staring-at-recession-or-depression\/#Let-us-talk-numbers\" title=\"Let us talk numbers\">Let us talk numbers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/covid19-are-we-staring-at-recession-or-depression\/#What-next\" title=\"What next?\">What next?<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"But-first-the-difference-between-recession-and-depression\"><\/span><strong>But first, the difference\nbetween recession and depression<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In simple words, depression\nis an extended version of recession. The thumb rule states that recession is\nwhen an economy reports negative or significantly low GDP growth rate for 2\nquarters. In contrast, depression is when the decline is long-term and can last\nfor several months to years. It results in high <a href=\"https:\/\/www.tickertape.in\/blog\/unemployment-the-deadly-cost-of-covid-19\/\">unemployment<\/a>, shortage of\ncredit availability, <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-a-stock-market-crash\/\">stock market crash<\/a>, reduction in output and investment,\nbank failures, decline in trade and commerce, and so on.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Where-do-we-stand\"><\/span><strong>Where do we stand?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is surprising how some of\nthe results of depression resonate with what we have had or are witnessing\ncurrently. Several <a href=\"https:\/\/www.tickertape.in\/blog\/how-to-invest-in-shares\/\">stock market<\/a> crashes, two trading halts, volatile rupee, Yes\nBank crisis, employee layoff, lower-interest rate regime (repo rate now stands at\n4.4%) and much more. Our aviation sector is grounded, the restaurant sector is\nburnt, the auto sector is in shambles.<\/p>\n\n\n\n<p>In other words, the Indian\neconomy was already in a bad shape when COVID-19 flew in. With the novel\ncoronavirus tightening its grip on the nation, what once was the opinion of\nsome experts\u2014that we\u2019d hit recession\u2014has now become a worry of masses. Well, we\nare not alone, the entire globe looks to be going down together.<\/p>\n\n\n\n<p>Simply speaking, we are at\ncrossroads. Looking at the speed at which the virus is spreading\u2014almost like a\nwildfire\u2014containing it is the need of the hour. As such, the country is under a\n21-day lockdown resulting in the force-stop of all commercial activities\nexcluding essentials and basic healthcare. Our economy is only getting glum.<\/p>\n\n\n\n<p>Unfortunately, there is no\nsecond way to curb the devil\u2019s impact at present, given it is novel and has no\nvaccination as yet. And history is proof. Finding a vaccination to fight a\npandemic takes no lesser than a year. Naturally, experts across the globe are\nthinking out loud: there are high chances we might be entering into a period of\neconomic depression.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Let-us-talk-numbers\"><\/span><strong>Let us talk numbers<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Moody\u2019s, a reputed rating\nagency, forecasted the global GDP growth rate to be as low as 2.6% in 2020.\nThis was before the virus. Now, when the virus has widened its spell on almost\nall the sectors, it has downgraded the growth rate to 2.2%. Speaking of India, Moody\u2019s\nhas downgraded its GDP growth forecast for 2020 twice in a just month, which now\nstands at 5.3%.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-next\"><\/span><strong>What next?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Fortunately, the MD of IMF, Kristalina\nGeorgieva has some good news amid concerns about the coronavirus. She says that\nwe can expect a faster recovery from the depression, as early as in 2021 if we contain\nthe virus\u2019 impact sooner.<\/p>\n\n\n\n<p>To conclude, the\nresponsibility of making things right lies with governments and financial\npolicies across the globe. Zoom in and you will learn that we are equally\nresponsible at the micro-level, let us stay home. Let us not be instrumental in\nworsening things. It is only seldom times that we get such an opportunity to\nenhance the national well-being. So, let us make the most of this, stay home\nand stay safe.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>COVID-19 has slowed down the already reeling economy, so much so that we may hit recession, or worse depression! Read to know more<\/p>\n","protected":false},"author":27,"featured_media":1008,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[10,1744],"tags":[],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2020\/04\/Recession-or-depression-3.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1001"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=1001"}],"version-history":[{"count":2,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1001\/revisions"}],"predecessor-version":[{"id":1027,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/1001\/revisions\/1027"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/1008"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=1001"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=1001"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=1001"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}