This time is not going well for the global economy and problems like inflation and Russia-Ukraine war have broken its back.
The stock market has also been witnessing a steady decline for the last few months and so far this year, investors have lost $ 20 lakh crore i.e. about Rs 1,600 lakh crore.
Investors are not expected to get relief even further and this decline may continue.
How big is the loss to the investors?
How big is the loss to investors in the global market this year can be gauged from the fact that it is almost six times more than India’s Gross Domestic Product (GDP). India’s GDP is $3.2 trillion.
Apart from this, this loss to investors is almost equal to the GDP of the world’s largest economy US ($ 23 trillion) and 20 percent of the global GDP of $ 100 trillion.
The decline will continue due to the sound of recession
If all the analysis and experts are to be believed, then the loss of investors is not going to stop and due to the fear of global recession , the stock markets around the world may fall further in the coming months.
Economists have feared an economic slowdown in the US and Europe due to the war in Ukraine and interest rates being raised to control inflation. It is likely to take the form of a global recession.
Why is there fear of recession being raised?
Inflation has reached a record level at this time around the world including America and India. These days the inflation rate in America is the highest in the last 40 years and all the products including food items have become expensive.
To control this inflation, banks in America and other countries are increasing the interest rate, so that people have less money and spend less.
Due to this there is a possibility of slowing down the pace of the economy and coming into recession.
What is the status of India?
India’s position remains bad. Investors are withdrawing money from the country and the depreciation of rupee and rising inflation has made the situation worse. No improvement is expected in this.
In January, the Indian rupee was at 74 against a dollar and now it is about to reach 80. The Reserve Bank of India (RBI) is trying to stop this decline, but so far all efforts have failed.
When the economy of a country or the world registers a decline for two consecutive quarters, then it is called economic recession. In recession, there is a fall in the stock market and unemployment etc. Before Kovid, there was a recession in 2008 as well.