Recession on it sector


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Recession on it sector

  2. 2. Road map What is recession? • Causes of recession • Impact of recession • How to come out of recession. •
  3. 3. WHAT IS RECESSION? In economics, the term recession describes the reduction of a country's gross domestic product (GDP) for at least two quarters. The usual dictionary definition is quot;a period of reduced economic activityquot;
  4. 4. • In macroeconomics, a recession is a decline in a country's gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year
  5. 5. Causes of recessions • Currency crises • Energy crisis • Under-consumption • Overproduction • Financial crisis
  6. 6. Currency crises A currency crisis, which is also called a balance-of-payments crisis, occurs when the value of a currency changes quickly, undermining its ability to serve as a medium of exchange or a store of value. It is a type of financial crisis and is often associated with a real economic crisis
  7. 7. Energy crisis An energy crisis is any great bottleneck (or price rise) in the supply of energy resources to an economy. It usually refers to the shortage of oil and additionally to electricity or other natural resources. An energy crisis may be referred to as an oil crisis, petroleum crisis, energy shortage, electricity shortage or electricity crisis
  8. 8. Underconsumption In underconsumption , recessions and stagnation arise due to inadequate consumer demand relative to the amount produced
  9. 9. Overproduction In economics, overproduction refers to excess of supply over demand of products being offered to the market. This leads to lower prices and / or unsold goods
  10. 10. Financial crisis The term financial crisis is applied broadly to a variety of situations in which some financial institutions or assets suddenly lose a large part of their value
  11. 11. How to know recession? Indicators to say a nation is in recession; - People buying less stuff • - Decrease in factory production - Growing unemployment • - An unhealthy stock market •
  12. 12. IMPACT OF RECESSION ON IT SECTOR The impact of Recession is unpredictable. The main effect of recession is in IT sector and is mainly related to the job loss and unemployment
  13. 13. How to come out of recession? It is unhealthy for any nation to be in Recession;So, Government will take certain countermeasures to eliminate or reduce the Effect of recession for turnaround; Important Point: Today, it is a market Economy Producers; Consumers; Can produce and Can decide to sell at their buy or not; prices
  14. 14. But, Government does not have direct control on Producers’ & the Consumers’ behavior; But, they can influence millions of Producers & Consumers with Government’s policies; Government has 2 plans Monetary Fiscal Policies Policies (By RBI) (By Govt.) Government influences the RBI manipulates economy by changing how the available supply of it (Government) spends money in the country and collects money
  15. 15. Fiscal Government influences the economy by changing Policies how it (Government) spends and collects money More money 1] Tax cuts for available for businesses or for individuals Demand spending picks 2] More Individuals get up; Spending salary and by Govt. to spend Market create jobs money can 3] Automatic recover; fiscal policy; Some income to unemployed Unemployment people to spend Insurance
  16. 16. Monetary Government manipulates the available supply Policies of money in the country More money 1] Reduce available for reserve bank Demand ratio to give loans picks up; 2] Lower the Individuals take interest rates more loan Market can 3] Use its own It becomes an recover; reserved income to Govt. money to buy to inject money Govt. bonds into the market
  17. 17. BIBLIOGRAPHY • • •
  18. 18. QUESTION ?
  19. 19. THANK YOU