Recession in economies

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In economics recession is a business cycle where there is a decline in economic activities. It is triggered by financial crisis, external trade shock, supply shock or a pandemic. Recession causes decline in income, employment and production.
Many developed countries are now facing recession due to a global pandemic corona virus causing the whole world and economic activities to shut down completely. When the income of a particular area decreases it cause a severe economic policies to implement on. Trade, higher income and high rate of employment are the main factors for a boom in an economy. But now every country is suffering from recession and the under developing countries are at a greater risk to be in depression.
USA, the super power of world has also been affected by this deadly virus. It has been estimated that its economy is pulled back by 10 years.
Recession can be changed into recovery by increasing trade, export and production. Another way is to take loan from IMF. Better monetary policy and fiscal policy can also be useful.
Higher interest rate, reduction in wages or consumers confidence, Lockdown, unemployment and decline in consumers purchasing power contribute towards recession. Effects of recession includes slump in stock market, market rigidity and increase in national debt.
Now a days the decline in the price of oil triggered by Russia- Saudi Arabia oil price war. It was the worst drop since the greatest recession in 2008. Stock market experienced a largest one week decline worldwide.
The collapse in tourism industry, hospitality industry and energy industry also caused recession in the economy system of World.
A great collapse in stock exchange and rising prices the 2020 stock market crash are also the reason of this situation. Demand is high but supply is low due to closed industrial units.
Economy can get better and enter into recovery phase by opening the industries, providing employments at high rate of wages, low rate of interest and higher trade.
This recession can also cause decline in the number of scholarships opportunities and cause high rate of fee in schools, colleges and universities. The number of facilities that were given to people before recession like free transport will be reduced.
China, the world’s second largest economy is expected to grow only 2% this year, according to TS Lombard, the research firm. Oxford economics estimates that the global economy will contract marginally this year.
Another possible prediction is that this epidemic will also come to an end and the global economy will recover but when will it happen is difficult to predict.
The bank of England has been warned that the UK economy is more likely to suffer its greatest recession this year. The recession will decrease once the Lockdown is lifted causing the businesses to resume and the wheel of life will start moving. But the period from recession to recovery will not be short it will take time. The only way to get through it is by acting patiently and logically towards it.

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