In the last few days, several business leaders including the likes of Elon Musk have sounded warning bells for the world economy. The World Bank now joins the chorus. Are we headed for a recession in 2022?
This and other news picks from Business Management Blog for 10th of June 2022.
Warning from World Bank: Are we headed for a recession?
World Bank says recession will be ‘hard to avoid’ for many countries. Reasons cited by World Bank for this latest gloomy outlook: the war in Ukraine, lockdowns in China, supply-chain disruptions and the risk of stagflation.
Stagflation is the combination of stagnant economic growth and high inflation.
World bank expects the global economy to grow at an annualized pace of just 2.9% this year. That is down sharply from the 5.7% growth rate last year.
Source: World Bank
Are there any bright spots for the global economy?
Thankfully, all is not gloomy.
Most major economies, including the U.S., Europe, the United Kingdom and China, are each tracking toward GDP growth that will be half that of 2021.
However Asia, outside of China, offers some ray of hope.
Chetan Ahya, Chief Asia Economist at Morgan Stanley says that in Asia, outside of China, we generally see healthy economic activity, and this region looks to outperform to some degree.
India will see a slight stepdown from 2021 but is still on pace for 7.4% growth. GDP growth for Korea and Taiwan remains healthy. Japan too is expected to better its last year’s record.
Tip of the day: How to prepare for recession?
Hanna Horvath, a certified financial planner lists 5 things to do with your money right now to prepare for a recession.
- Think about where to cut back spending, limit discretionary and luxury spending
- Start building your rainy-day reserves. Build an emergency fund
- Pay off high interest debt
- Think about your career – time to network and upskill
- Keep calm and carry on – avoid kneejerk reactions.
Market Watch: India’s Rural Economy
Disruptive business models are stimulating inclusive growth in agriculture and rural finance.
Over the last five years, the rural ecosystem in India has grown ~10% per annum and still has strong headroom for growth. It employs 68% of the total workforce.
What’s boosting this growth:
Rural digitization, affordable tech, financial inclusion initiatives by the government, community empowerment, improved infra and a surge of start-ups.
Personality of the Day: Prakash Padukone
Today we celebrate the birthday of legendary Indian badminton player – Padma Shri Prakash Padukone.
Winner of 9 consecutive national senior championships, gold medal in the 1978 commonwealth games and the first Indian to win the prestigious All England Championships in 1980.
Happy Birthday Sir.