Delhi, October 13: Day after the International Monetary Fund (IMF) announced what many have been fearing, World Bank President David Malpass warned the same that a large part of the globe (IMF puts it at one-third) will witness recession this year or the next and called for targeted support for the poor. After these predictions from experts, questions like ‘What is Recession’ and ‘How to Prepare for a recession’ started trending on google.

According to economic experts around the world, the biggest impact of this economic downturn will be on America. After that Britain and Europe could be deeply hurt by the recession. China will also come under wraps. However, India need not panic too much as IMF said that India is in a better position than other countries to tackle the crisis. IMF MD Kristalina Georgieva Hails India's Economic Growth, Says 'Country A Bright Spot On This Dark Horizon' (Watch Video)

What Is Recession?

When the Gross Domestic Product (GDP) of any country declines for six consecutive months i.e. for 2 quarters, then it is called economic recession in economics. On the other hand, if the GDP of a country falls by more than 10 percent during 2 consecutive quarters, then it is called depression, which is frightening. After the First World War, the Great Depression came in the 1930s, which is called The Great Depression. A recession is short but its impact can be long lasting. India To Remain Fastest Growing Economy Even After 6.8% GDP Growth in 2022, Says IMF

What Happens During a Recession?

People may experience significant impacts on their daily lives during a recession. Everything from groceries to shoes is often more expensive, and workers may have less job security. Income equality worsens, unemployment rate increases, manufacturing activity declines and consumer spending decreases during a recession.

How to Prepare for a Recession?

While preparing for a recession, it is important that people cut back on their spendings and have enough savings to cover three to six months of living expenses. Experts also recommend that people should remain invested while preparing for a recession. It is also important to reduce debt as lower debt-to-income ratio also expands your credit opportunities in case of an emergency.

Are We in a Recession?

Experts believe that though US and Euro zone may be heading towards a recession, India is unlikely to have any impact as it is a lot decoupled from the global economy. However, amid the threat of recession, the IMF has reduced India's economic growth rate estimate to 6.8 percent for the financial year 2022-23. But India is in a much stronger position than China, America and Britain. The IMF has estimated that China's GDP growth could be 4.4 percent in the year 2023. Whereas in 2023, India's projected growth rate will be 6.1 percent. Amidst the threat of recession, this news is going to give relief to India.

When Was the Last Recession?

In the postwar period, between December 2007 and June 2019 the world experienced the most severe recession. At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression. Though economies of China, India and Indonesia grew substantially during this period.

The global economy had been hit multiple blows with issues like the war in Ukraine that has driven up food and energy prices to COVID-19 and the toll on economies, as well as soaring costs and rising interest rates. Global inflation is expected to peak at 9.5 per cent this year before dropping to 4.1 per cent by 2024.

(The above story first appeared on LatestLY on Oct 14, 2022 09:52 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).