RECESSION AND UNEMPLOYMENT

The economy is going through a tumultuous time, with two major economies going into recession. Considering the fact that the GDP contracts for two consecutive quarters is the leading cause of the phenomenon. Recently we have seen Germany and New Zealand falling into the recession trap. India also faced recessions with manifold levels of consequences.

Indian context

Dating way back in 1962 and 1965 we have seen multiple symptoms of slowing economic activity in the country. One of the leading factors was the ‘rising cost of production’. This invariably led to a low level of unemployment and affected mostly the middle and the rich classes. Natural calamities like drought during the time, did aggravate the situation back in the day. The GDP growth for the period is said to be in the negative range at – 3.66 percent.

2023 scenes in India….

In the present day and age, the scenario for India is high in terms of global challenges. With rapid globalization and technological advancement, we as a nation have many factors to analyse. With the GDP growth recording at a surprising 7.2 percent in June, there are still fears on multiple fronts. With trade partners facing issues, it is definitely going to affect the sentiment of the Indian economy. The European nations are struggling to meet the inflation target range of two percent, the trade with India would be one of the alternatives in terms of costs and tariffs. It would help in terms of controlling inflation. Trade with China is getting tricky since they had bouts of reopening and lockdowns during the pandemic period. And with the Chinese economy reopening it did not give any respite to the trade as it had problems with respect to manufacturing, leading to a fall in imports.

Unemployment trends… bird's eye view….

In terms of the recent trends in employment, there is a steep decline in the “white collar job markets”. Mainly caused by the structural changes in employment in the nation. The new jobs added to the IT sector in India saw a steep decline of 32 percent stated by multiple sources. The promising sectors of employment in India today real estate, gas, pharma, hospitality, and banking are said to be promising sectors for hiring. With technological advancement and changes in work structural changes in firms, it is more likely to see massive job losses in India by the end of this year.

As working professionals, we can take steps to stay afloat in difficult times. Some of the key tips:

ü Diversify the income channels. Try Investing in several places to diversify the risk.

ü Try building the emergency fund. This will guard us against unexpected expenses.

ü Prioritize paying off high-interest debt.

ü Focus on budgeting.

ü Resist impulsive investments.

ü Plan more, panic less.

Stay ahead of your peers, and take decisions with consultation with professionals in terms of maintaining your finances. It would do us good in the long run, and keep us self-sufficient in the immediate future.