According to the IMF (International Monetary Fund) due to the COVID-19 lockdown world’s economy is already under Recession. According to IMF managing directors spech world has anticipated the worst economic fallout since the “ Great Depression”.
Unemployment was rising, company profits falling down, financial markets were tumbling and the housing sector collapsed through the world due to COVID-19 out break This is called Recession.Recessions simultaneously occured several times in the past four decades followed by the mid 1970s, early 1990s and early 2000s, which is 2008 Recession.
The General recognition of the decline in economic activity over a period of time is said to be a recession, very short term of decline are not considered as Recessions. Most analysts use, as a practical definition of recession, two consecutive quarters of decline in a country’s GDP (Gross Domestic Product) is called a recession.
The world is facing the worst global recession since the “Great Depression” of 1929. The Great Depression of 1929 lasted for more than 10 years and the world’s economic GDP growth rate seems to touch nearly -15%. Most of the country's unemployment verge up to 30%. This is the deepest economic crisis to date. Compared to the 2008 recession where the world’s GDP dropped to merely 1%. This period of economic crisis is called the “Great Recession”.
“April World Economic outlook projects global growth in 2020 to fall to -3%” — IMF
America is the world’s largest economy and has a strong trade and financial linkages with many other countries, most of the globally synchronized recessions coincide with the US. According to the United States, Economic Forecast for the first quarter of 2020 stated that US GDP falls 8.3% in 2020 and there is a 30% probability of deep recession. France enters recession with a 6% drop in the first quarter of 2020, this is the worst fall ever since world war 2(1945).
India’s Worst Economic Slowdown in a decade
India’s economy has fallen on hard times. The economy has a steep fall from 2016–17 and the fall is more dramatic in terms of the quarterly output estimates, from the growth of 8.1% in January -March 2018 to 4.5% In July- September 2019 due to the government’s weak policies and financial structure. According to Global Macro Outlook 2020–2021 released, the economic state of the country would result in a sharp loss in income and further weigh on domestic demand and the pace of recovery.
Advanced economies are seen contracting 2% in 2020 while emerging economies will slow to 1.9% from 4.2%.
Response to crises and recessions
Economic policies should be geared towards avoiding crises. Sustainable economic policies and financial structures are the best options. If these policies are insufficient, central banks will need to include financial stability risks in their analysis and decisions.