Economic Recession in 2020: Steps Can You Take Now to survive it

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The world has changed enormously in the three months since the last update of the World Economic Outlook in January. A rare disaster, COVID-19 has spread rapidly around the world. This pandemic will cause a global recession in 2020 that could be worse than the one triggered by the global financial crisis of 2008–2009. The catastrophic effect of the coronavirus is rippling its way through economies, destroying businesses, and crippling economic growth. But what exactly is a global economic recession? And what can you do to overcome it?

What is the Economic Recession?

Economic Recession is a period of general economic drop and is commonly accompanied by a higher unemployment rate, wages that do not go up, a downturn in the stock market, the housing market and other investments. In other words, a country’s finances aren’t growing, they’re freezing. When most people or businesses in a country abruptly stop spending as much money as they usually do, a decreasing spiral kicks into gear. Let’s see what happens next:

 

When consumer spending reduces, businesses adapt their strategies. This means they hire fewer people, cut back staff temporarily, and purchase fewer supplies from other businesses. The unemployment rate becomes larger and consumer confidence drops down fast. At this point, a vicious cycle is in full swing and things become worse.

Is a recession coming?

While leading economists around the world have been predicting an economic recession for several years (the economy dips about every 10 years). Since the Coronavirus pandemic and related global stock market plummets, specialist anticipated a recession around the globe will happen in 2020. Economists warned that stockmarket plunges were the beginning of the long-term economic recession.

The Impacts of Global Economic Recession ?

 

1. Businesses cut down spending in an effort to increase or sustain profits, many go bankrupt.
2. Rising unemployment: millions of people lose their jobs. College graduates will earn less than people joining the workforce before the recession occurs. Actually, the ones that have less education certificate and those that possess lower incomes will also affect considerably during a recession.
3. People try to pay their debts, which damages their credit scores. This makes it harder for many to borrow money in the future which in turn contributes to more economic stagnation.
4. Business investments go down and it becomes difficult to start a business.
5. Individuals, anxious about their jobs and investments, expend less on everything from food to new homes and cars, and discretionary goods like travel, gifts, home furnishings, electronics, and cloth
6. Governments have less tax revenue to make an investment in their communities.
7. The stock market, government debt, and home prices all continue to are damaged by these economic pressures.
8. Decreasing in export revenues: the global economic recession will affect especially with developing countries due to lower demand and falling prices for commodities, including the demand for manufactured goods.
9.  Global tourism demand will decline immensely during an economic recession.

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