Saturday, February 28, 2009

A Mammoth in a Room

global recession global economy global economic growth global economic growthI am sure you guys would wonder what this “mammoth in a room” is all about! Well, this extract is all about the Economic recession. “Mammoth” here is the global economy… more specifically the most heated up topic of discussion – the global economic recession. Let’s assume that a mammoth has been captivated in a room. How can it grow? The global economic growth has suddenly come to a halt, affecting every single individual on the planet a way or the other. Banking and financial sector, IT sector, insurance sector and foreign trade sector have all been victimized by the recession venom. As the mammoth ceases to grow any longer, development has been paralyzed world wide. Joblessness, foreclosure, salary slashing, etc are all at the peak.

You might be facing hard time to pay the skyrocketing bills for your car’s fuels, grocery prices and other maintenance cost. Confusion has surged in to your life so stealthily and yet so steadily! Civilization is feeling the heat of what is known as economic recession. With an abrupt downturn of the global economy, people are gripped in the pronged pressure of tougher time. That doesn’t mean you can’t survive the economic recession! If you sit back on your couch and spare a thought over this issue, you can find loads of ideas to make money, when apparently survival seems to be too hard.

Help The Mammoth to Grow

Invest in the Stock Market: It may sound a bit too weird, but as a matter of fact, this is a time you should take advantage of. With crashing stock market, the purchase costs of shares of certain medium to big brands have come down. Purchase some of them! By this you will create a provision for your better future as well as adding worth to the economy.

Invest in Real Estate: Real Estate sector has crashed too. The cost turned down. This is the right time make some investment on real estate if you can. Purchase a land or a house at low cost now to be sold at higher cost in future. This way you will make some extra dollar in recent future and at the same time providing nutrition to the mammoth to grow.

More the mammoth will grow, faster the good time will be reached.

Start off a small business: Gear up your pace; go ahead to kick start a home based business of your own. Chalk out an action plan that suits you and your life style. Just be at it. Survey the market carefully, lest you don’t get trapped in scam. Data entry jobs, cooked food home service etc. are a couple easy options for you.

Steer clear of bad investments: It’s not only about money, but about time and labor too! Investments in wrong sectors will cease the mammoth to grow. Wrong investment implies wastage, which in turn, means letting the mammoth suffer from further malnutrition!

Remember, “Change is the only permanent thing in life”. Recession is just a phase that has to see its trough. But to survive the recession is what you should spare thoughts over.

Effects of Gobal Economic Recession on Indian Economy

global recession global economic crisis global economy recession in India Indian economy economic growth of india global recession global economic crisis global economy recessionThe current global economic crisis has affected almost every country. The might of the mighty economies around the globe is enormously perturbed by the economic crisis around the world. They are facing acute catastrophe of liquidity and credit. The prime explanation being, global economy does not function in isolation. All economies are webbed with each other. Oscillation in the trade balance and economic conditions send tremors throughout the economic web.

Is India in Recession

Starting from economists to industrialists and also general mass on the streets must have been horror-struck by the very thought of recession in India. It’s recession in India. The Indian economy is not insulated from the global economic crisis that is looming over. Documentations show that the industrial growth has attained a mere 1.3% hike as compared to the same period in 2007. 1.3% is the lowest IIP (Index of Industrial Production) that has ever been registered in last ten years. This is a major issue of concern for the policy generators and industries.

Effects of recession in India

Several sectors of Indian economy are likely to face severe jolts as an effect of the global economic recession. The front runner among them is the real estate industry. A significant descend in demand has caused a stiff fall in property prices, nearly 15-20%. There may be an additional decline of another 20% in the coming Six months. The hues and cries of the real estate sector have infected the construction industry as well. The financial service sector is possible to be a victim of the global recession too. The GDP is going to suffer big time as this three sectors account for almost one third of the service GDP. The sudden slow down of industrial growth is expected to deliver a severe blow to the transport industry in turn.

The Indian IT companies are dependent on the banks and financial institutes for nearly half of their revenues. The slowed down economic activities due to current global economic crisis has restricted the financial institutes and banks to offer revenues to this sector which forced the IT industry to face a severe crisis.

The Indian Rupee is gradually gaining strength against Dollar. The consequence of this is emerging worries for the exporters though the long term prospect for the Indian exporters is stable.

The ripples of crumbling global market can be seen world wide. Its effect can be felt in the Indian economy too. Though the watchful approaches for economic reforms have saved her from a possible disaster of greater magnitude, but Indian economy is stiffly down trodden, beyond doubts. Good news is that the Indian financial infrastructure is less exposed to foreign assets and their derived products than other countries. The factors determining economic growth is more of local in nature. No sector has a dominant share on earning growth. The growth aspect of the Indian economy is moved forward by strong growth in domestic consumption and noteworthy spending on building infrastructure. The overall impact is, more of a sterilized effect on the Indian economy than the other countries has witnessed due to the current global economic recession.
The much criticized slow paced economic growth of India has proved to be a boon in disguise.

Sunday, February 15, 2009

Global Economic Recession – Tidbits About The Economic Recession Effects

What is Economy Recession?

Global economic recession has been the most heated up topic of debate these days! The current inflation recession has suddenly peeped through to arrest the economy growth world wide, but most of us can’t understand the reasons and causes behind it, although we look for it. The current global economic recession is one such situation that has thrown the world’s employment structure in deep soup!
The economy that grew over a phase of time tends to dawdling down. An economy characteristically grows for six to ten years and then goes to recession for six months to more than a year. The declining curve of the business life cycle is the economic recession. The first quarter of negative growth in a recession cycle is often followed by positive growth for several quarters, followed by another quarter of negative growth. The economic recession is the negative growth of GDP for two consecutive quarters or more. The official agency in charge declared that the economy is in a state of recession in the National Bureau of Economic Research.

What Causes Recession?

A recession is primarily caused by the measures adopted to control the money flow in the economy.

The Federal Reserve is responsible for maintaining an ideal balance between money supply, interest rates, and inflation. When The Federal Reserve falters with this equation, the economy is forced to correct itself.

The Feds monetary policy of injecting huge volume of money supply into the money market has kept interest rates lower while inflation continues to rise. The economic recession affects a nation or the global economy as a whole in many ways. Inflation recession is a general rise of the prices of goods and services over a substantial period of time. The higher the rate of inflation, the smaller the amount of goods and services that can be purchased with the same amount of money. During such global economic recession, people tend to cut out overall spending and emphasize to save more. The individuals and businesses cut down expenditures and udergo a cost trimming operation, this causes GDP to crash. Unemployment rates rise as companies lay off workers to cut costs. It is these combined factors that cause the economy to fall into a recession – very much like a vicious circle.

These circumstances doubled with relaxed policies in lending practices making it extremely easy to borrow money can result in unsustainable economic activity and the economy coming to a near halt.

It is also said that recession can happen by factors that inflict short term growth in the economy, such as spiking oil prices or war. However, these are mostly short term in nature and rectify themselves in a quicker manner than the full blown recessions that have occurred in the past.

Economic Recession Effects

An economic recession can usually be felt before it happens. There is a tendency to see the economic environment changing in quarters preceding the actual onset. The growth in GDP will still be present, it will show signs of sputtering and you will see higher levels of unemployment, decline in housing prices, decline in the stock market, and business expansion plans coming to an hold. When the economy sees prolong periods of economic recession, the economy can be termed to as being in an economic depression.

The positive thing of Economic recession is that it rectifies Inflammation During an economic decline or recession, high yield stocks such as FMCG, pharmaceuticals, and tobacco tend to hold up better

Strategies to rectify Economic Recession

The Strategies pushing an economy out of a recession varies depending on which economic genre the policymakers follow. While Keynesian economists may suggest deficit spending by the government to ignite economic growth, supply-side economists may suggest to trim tax to promote business capital investment. Laissez-faire economists may simply recommend that the government not interfere with natural market forces. Both government and business have responses to recessions.

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