-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
1/24
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
2/24
GLOBAL RECESSION
As sure as the spring will follow the winter, prosperity and economic growth will
follow recession.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
3/24
INTRODUCTIONIn economics, the term recession
generally describes the reduction
of a country's gross domestic
product (GDP) for at
least two quarters.
a period of reduced economic activity.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
4/24
Cont.... a significant decline in the economic activity spread across
the economy, lasting more than a few months, normally
visible in real GDP growth, real personal income,
employment , industrial production, and wholesale-retailsales
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
5/24
Attributes of recession In macroeconomics, a recession is a negative
real economic growth, for two or more
successive quarters of an year. A recession has many attributes that can occur
simultaneously and can include declines in
coincident measures of activity such asemployment, investment, and corporate
profits.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
6/24
Predictors of recession In the U.S. a significant
stock market drop has
often preceded the
beginning of a
recession.
Inverted yield curve
Index of Leading(Economic) Indicators
The three-month
change in the
unemployment rate and
initial jobless claims
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
7/24
History of recession Great Depression - August 1929 to September 1939:
longest (and deepest) recession of the 20th century
January-July 1980 and July 1981-November 1982: 2years total
July 1990-March 1991: 8 months
March 2001-November 2001: 8 months
December 2007-March 2009: 15 months and
counting.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
8/24
US Crisis Hits India When the United States sneezes, the rest of the world
may well catch a cold.... Rich Miller.
US faced major crisis because of: Sub prime mortgage crisis.
Rising oil prices
Global inflation
High unemployment rates
A declining dollar value.
Capital flight in emerging markets.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
9/24
Causes Of Recession 2007-2009 Currency crisis
Energy crisis
War Under consumption
Overproduction
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
10/24
Effects of recession Bankruptcies Credit crunches Deflation
Foreclosures Unemployment Difficulty in borrowing Unemployment
Falling profitability Falling stock market Decline in consumer confidence
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
11/24
Impacts Of Slowdown in India: A global recession would take a slowdown in global
growth to three percent or less -IMF
The slowdown in US and other developed nations isdefinitely hurting Indian growth story.
The signs of this can be evidenced from the
tumbling share market (BSE & NSE) which shed
more than 50% since Jan 08.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
12/24
Impacts Of Slowdown in India: Sectors affected till now are almost all, reason
behind this is:
External Trade of India : 40% of GDP FII`s Investment in share market upto Jan 08:
US $ 65 Billion
FDI in India (Jan 08) : US $ 50 Billion
Estimates of Annual GDP has been lowered to
7.5% from 9%
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
13/24
Impacts Of Slowdown in India: 70% of IT export is to US, out of which 40 % is to
Finance Sector
Many international garment brands are made in
Tirupur factories in Tamilnadu in India.
From Surat in Gujarat, Diamonds are exported to
US and other countries
All these are few examples how India is goingto get affected
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
14/24
Strategies To Deal With
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
15/24
Survival strategies Revaluate your entire pricing structure.
Go bargain hunting.
Consider strategic investments. Monitor your cash flow.
Invest in sales and marketing technology.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
16/24
Survival strategies(Cont.)
Avoid Underutilisation of employees.
Be slow to hire and quick to fire new employees to
keep only the best. Talk to your bank and other sources of capital.
Think strategically!!!
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
17/24
5 important survival rules that allow you to
profit even in recession Recession Survival Rule #1: Sit in an Exit
Row. (Invest for short duration)
Recession Survival Rule #2: Bet on Income.(Invest where you earn dividend)
Recession Survival Rule #3: Build in Safety.
(Bonds are safe game)
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
18/24
Contd Recession Survival Rule #4: Think booze, bombs,
and butts. (Be it Sin stocks, gaming firms, or
defense contractors - stick with firms that have lower
debt, steady sales growth, and that are posting strong
earnings.)
Recession Survival Rule #5: Hedge Your Bets.
((ETFs) as the Rydex Inverse S&P 500 StrategyInverse Fund (RYURX), which is designed to rise in
value by 1% for every 1% the S&P 500 falls.)
http://finance.google.com/finance?q=ryurx&hl=en&meta=hl%3Denhttp://finance.google.com/finance?q=ryurx&hl=en&meta=hl%3Den -
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
19/24
Recession survival strategies for
business An Internet presence is crucial as Internet sales are likely
to see a significant increase due to rising fuel costs and a desireby consumers to consolidate excess travel spending.
Grow your business through acquisition because arecession is a good time to acquire property and assets at veryreasonable prices. Your investment is likely to increase and your
business can benefit from the growth and expansion.
Consider taking your business global because smallbusinesses can receive assistance from the U.S. government toexpand into foreign countries.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
20/24
Adapt to recession Project cash flow in advance and monitor budget
Pressurize debtors to pay up
Review overheads and improve cost efficiency
Review stock levels
Keep up to date with latest financial information
Think hard before incurring capital expenditure
Aggressively seek new business Be open to new ideas and accept them logically
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
21/24
Analyse What you are doing?
Avoid taking bad business
Not accept business that cannot cover costs
Survival is more important than size Operate in lean and mean mode
Aggressively pursue debtors for payment
Look for talented unemployed people
Marketing assumes further importance.
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
22/24
What will recession teach us?
What does not work?
Risk Management.
Profitability is important. Valuation is not.
Strong fundamentals win. Always!
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
23/24
QUESTIONS
ARE
WELCOME
-
8/7/2019 ECONOMIC RECESSION IN INDIA & SURVIVAL STRATEGIES
24/24