Recession - The Silent Killer!

A recession is not a one-day event like a stock market crash. Instead, recession starts slowly & has long-lasting, adverse effects on the overall economy.

Let’s consider 4 industries:

• Aviation
• Travel
• Technology
• FMCG

The aviation industry is directly impacted by the lockdown as all commercial flights are banned. Companies like IndiGo, SpiceJet face issues. Since all travel is banned, travel industry companies like MakeMyTrip, ClearTrip are affected indirectly as people avoid holidays.

As people are not traveling, these travel companies no longer spend on advertising and marketing. This includes online ads which form a major part of their advertising. Since they cut down on advertising costs, technology companies like Google, Facebook suffer indirectly.

When technology companies suffer they start cutting down employee salaries or even start laying off their employees. When employees (end consumers) have less money in hand and even lesser assured of getting it in the future, they start saving as much as they can.

When consumers stop spending on goods like packaged foods, branded clothes, etc. then it’s now the time of FMCG companies to suffer. Companies like ITC, FutureGroup, etc. are affected. See how the cycle affects everyone involved (people and companies) slowly & steadily.

Recession is a slow chain reaction. It’s a silent killer. Not everyone may feel its adverse effects but most sections of society suffer to some extent.

Two things you can do:

1. Save your money and avoid unnecessary expenses.
2. Help others in any way possible.

Currently, those who are in a good financial position to spend on discretionary goods and services should definitely spend. But for the majority of people who are not in a good financial position, they should avoid spending and have as much money on hand as possible.