RECESSION AROUND

THE WORLD

PRESENTED BY,
PRIYA.S

PREETY.
 WHAT IS RECESSION?

 Slowing down of every economic activity

 In a recession many things falls together- production,
employment, prices, and business profits
 Business go bust, and this can lead to runs on banks and a
crisis in the financial system
 when the gross domestic product (GDP) of a country
declines for two or more consecutive quarters of a year
 a general slowdown in economic activity over a sustained
period of time, or a business cycle contraction.
 HOW DID TODAYS RECESSION START?

 Default in repayment of
housing loan started.
 Financial institutions and
investment bankers started
feeling liquidity crunch.
 Along with them all the
investors who had invested in
those securities started feeling
the affect of it.
 This has affected liquidity and
profitability badly at US market
as well as in Financial Markets
throughout the world.
 HOW IT STARTED AFFECTING WHOLE
WORLD?
Globalization
Dependency of developing
countries on the “Demand”
generated from high spending
countries like US and
Eurozone has increased
Huge money (some trillion
$)of various FI and IB are
invested in these developing
economies through direct
investment and share market
 When these FI`s & IB`s started
feeling liquidity crunch, they
started withdrawing money
from developing countries
 At the same time process of
bankruptcy, heavy losses, huge
lay off`s of people started in US
 This has resulted into slow
down of overall demand in the
market of US and vanishing of
money from the world market
 With a slowdown in US market many
in developing economies started
feeling pinch of cash in their market
 This is the beginning of slowdown in
other financial markets in the world
 Along with slowed down US market
many FI`s and IB`s started
withdrawing money from these
developing nations to save there
business at home has added fuel to
liquidity crunch
 Thus slowdown process has gripped
whole world slowly and steadily
 The process is still going on
 No direct impact on nations like
China and India is yet seen
 Indirect impact was so huge that
share market in China and India
shaded almost 50% of their value
 CASUALTIES IN OTHER PARTS OF THE
WORLD

Iceland, once the small nation with highest per

capita income is almost insolvent. IMF has agreed an
aid of US$ 2 billion and some European countries
are also contributing
Hungary already received some Billion dollars from
IMF
Pakistan is asking for money from IMF and getting
some from UAE and Saudi Arabia
Many Oil producing nations has a setback with
price of crude oil is near to $50 per barrel which is
almost 35% of what it was before 6 month
Growth rate of many developing as well as
developed countries are contracting
THANK YOU
ONE N ALL!