Recession around the world

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2009

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Recession around the world

  1. 1. PRESENTED BY, PRIYA.S PREETY. RECESSION AROUND THE WORLD
  2. 2. WHAT IS RECESSION? <ul><li>Slowing down of every economic activity </li></ul><ul><li>In a recession many things falls together- production, employment, prices, and business profits </li></ul><ul><li>Business go bust, and this can lead to runs on banks and a crisis in the financial system </li></ul><ul><li>when the gross domestic product (GDP) of a country declines for two or more consecutive quarters of a year </li></ul><ul><li>a general slowdown in economic activity over a sustained period of time, or a business cycle contraction. </li></ul>
  3. 3. HOW DID TODAYS RECESSION START? <ul><li>Default in repayment of housing loan started. </li></ul><ul><li>Financial institutions and investment bankers started feeling liquidity crunch. </li></ul><ul><li>Along with them all the investors who had invested in those securities started feeling the affect of it. </li></ul><ul><li>This has affected liquidity and profitability badly at US market as well as in Financial Markets throughout the world. </li></ul>
  4. 4. HOW IT STARTED AFFECTING WHOLE WORLD? <ul><li>Globalization </li></ul><ul><li>Dependency of developing countries on the “Demand” generated from high spending countries like US and Eurozone has increased </li></ul><ul><li>Huge money (some trillion $)of various FI and IB are invested in these developing economies through direct investment and share market </li></ul>
  5. 5. <ul><li>When these FI`s & IB`s started feeling liquidity crunch, they started withdrawing money from developing countries </li></ul><ul><li>At the same time process of bankruptcy, heavy losses, huge lay off`s of people started in US </li></ul><ul><li>This has resulted into slow down of overall demand in the market of US and vanishing of money from the world market </li></ul>
  6. 6. <ul><li>With a slowdown in US market many in developing economies started feeling pinch of cash in their market </li></ul><ul><li>This is the beginning of slowdown in other financial markets in the world </li></ul><ul><li>Along with slowed down US market many FI`s and IB`s started withdrawing money from these developing nations to save there business at home has added fuel to liquidity crunch </li></ul>
  7. 7. <ul><li>Thus slowdown process has gripped whole world slowly and steadily </li></ul><ul><li>The process is still going on </li></ul><ul><li>No direct impact on nations like China and India is yet seen </li></ul><ul><li>Indirect impact was so huge that share market in China and India shaded almost 50% of their value </li></ul>
  8. 8. CASUALTIES IN OTHER PARTS OF THE WORLD <ul><li>Iceland, once the small nation with highest per capita income is almost insolvent. IMF has agreed an aid of US$ 2 billion and some European countries are also contributing </li></ul><ul><li>Hungary already received some Billion dollars from IMF </li></ul><ul><li>Pakistan is asking for money from IMF and getting some from UAE and Saudi Arabia </li></ul>
  9. 9. <ul><li>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 </li></ul><ul><li>Growth rate of many developing as well as developed countries are contracting </li></ul>
  10. 10. THANK YOU ONE N ALL!

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