Project Report On Global Recession
Submitted By:
Rimpi Arupkumar Dutta
PGDBM with Ecommerce
Roll No: 31
H.L College, Ahmedabad.
Global Recession
A global recession is a period of global economic slowdown. A definition of a global
recession is provided by the IMF. It regards a global recession to be occurring when the
global growth declines below 3%.
Informally, a recession in a country is a period of declining productivity. In a 1974 New
York Times article, Julius Shiskin suggested several rules of thumb to identify a recession,
which included two successive quarterly declines in gross domestic product (GDP), a
measure of the nations output. It is now a commonly mentioned definition of a recession.
In USA, NBER is regarded to be the authority that identifies a recession which takes
several measures into account in addition to GDP growth.
In developed nations other than USA, the two quarter rule is generally used for identifying
a recession. However defining a global recession is harder because of the role of
developing nations that are expected to have a higher GDP growth.
According to IMF, the real GDP growth of the emerging and developing countries is on an
uptrend and that of advanced economies is on a downtrend, since late 1980s. The world
growth is projected to slow from 5% in 2007 to 3.75% in 2008 and to just over 2% in
2009. Downward revisions in GDP growth vary across regions. Among the most affected
are commodity exporters, and countries with acute external financing and liquidity
problems. Countries in East Asia, (including China) have suffered smaller declines,
because their financial situations are more robust. They have benefited from falling
commodity prices, and they have initiated a shift toward macroeconomic policy easing.
The Perfect Storm of a Global Recession
The probability is growing that the global economy * not just the United States * will
experience a serious recession. Recent developments suggest that all G7 economies are
already in recession or close to tipping into one. Other advanced economies or emerging
markets (the rest of the euro zone; New Zealand, Iceland, Estonia, Latvia, and some
Southeast European economies) are also nearing a recessionary hard landing. When they
reach it, there will be a sharp slowdown in the BRICs (Brazil, Russia, India, and China)
and other emerging markets.
This looming global recession is being fed by several factors: the collapse of housing
bubbles in the US, United Kingdom, Spain, Ireland and other euro-zone members;
punctured credit bubbles where money and credit was too easy for too long; the severe
