Here's why our students are not worried about Recession!

What is Recession?

Recession is a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Economic output, consumer demand, and employment all often experience reductions during recessions. Recessions could last only a few months, but it could take years for the economy to recover to its pre-recession level.

Many people may perceive the early phases of a comeback as a continuing recession since unemployment frequently persists at high levels far into an economic recovery.

Will Recession in the West affect India?

The US, EU, and a significant portion of the Western world are all firmly moving toward an economic downturn. It is crucial to comprehend what initially caused this global recession in order to comprehend why India's finances continue to be strong. The Covid-19 epidemic broke out in early 2020, and while most nations imposed travel restrictions that had a significant negative impact on businesses and earnings, the resulting spillover effect on supply and demand dynamics destabilized even the most developed economies. In order to address this abrupt crisis, nations were compelled to implement immediate macroeconomic measures.

It's actually a competition to see who in the West goes into recession earliest. Currently, it appears that the United States is pacing ahead, but Europe is not far behind. Even if Joe Biden and his government are hesitant to acknowledge it, the largest economy in the world is currently 'technically' in a recession. The American economy has already seen two quarters of recession in 2022 alone. The GDP of the United States shrank by 1.6% in the first quarter. Between April and June, the US economy shrank by a further 0.9%.

While this is happening, Europe is under tremendous stress as a result of Russia's inconsistent natural gas supply during the previous few months. First, only 40% of the Nord Stream 1's overall capacity was used for gas supplies to Europe.

Germany is currently experiencing an energy crisis, and nations throughout the eurozone are rushing to restock their natural gas stockpiles. Without such reserves, Europe will unwind like an uncontrollable spiral in the winter months. In any scenario, the European economy will suffer greatly in the upcoming months.

Europe is currently experiencing a natural gas shortage, and Germany is experiencing an energy crisis. Without these reserves, Europe will spin out of control throughout the winter. Whatever the case, the European economy will suffer greatly over the next few months.

One of India's neighbors, Sri Lanka, is still struggling with a serious economic crisis. Families are now only able to survive on a few days' worth of rice due to the skyrocketing costs of gas, gasoline, and basic food supplies. While the Rajapaksa family, who have been ousted, was held responsible for the financial collapse in Sri Lanka, other problems are also contributing to a crisis-like situation in other emerging countries. Pakistan on the other hand has been a deepened economic crisis for years as well, on account of heightened incompetency, being war torn and undoubtedly rampant corruption.

The Bloomberg survey found something particularly encouraging about India's economic situation. There is 0% probability that India will have a recession any time soon. Despite the rupee's recent breach of the 80-to-the-dollar level against the US dollar, researchers who participated in the Bloomberg survey indicated that it is unlikely that India will enter a recession.

Despite all these global scares looming large, we have seen many of our students at Sharpener asking around about the recession staring at their faces. We understand. But thankfully, our deep ties with our HR partners, and our extra focus on skills over speed, quality over quantity ensures that if companies are hiring at all, we are pretty much secure; and when don’t companies hire!

So don’t worry about recession. The good thing about recessions is that it's temporary. And just like in 2008-09, India is always in a good position due to a self-sustaining economy.