About
A global recession is a period of global economic slowdown. The International Monetary Fund (IMF) takes many factors into account when defining a global recession, but it states that global economic growth of 3 percent or less is “equivalent to a global recession”. By this measure, three periods since 1985 qualify: 1990-1993, 1998 and 2001-2002.
However the current financial crisis of 2007–2009 has been considered the most serious since the Great Depression by leading economists, with its global effects characterized by the failure of key businesses, declines in consumer wealth estimated in the trillions of U.S. dollars, substantial financial commitments incurred by governments, and a significant decline in economic activity. Besides, It has severely affected the cost and availability of credit to both households and businesses.
Credit is the lifeblood of market economies, and the damage to our economy resulting from the constraints on the flow of credit has already been extensive. With recent job losses exceeding half a million per month, this year’s college graduates are facing the toughest labor market in 25 years. Many families are trying to cope with lost employment and depleted savings or are facing foreclosure on their homes. Firms have shut factories and cancelled construction projects. States and municipalities are scrambling to find the funding to provide critical services. We should not overlook the impact that the crisis is having virtually everywhere in the world.
So, what should you do during recession? It’s actually quite simple, the biggest fear you have and the biggest thing you should prepare for is the possibility that you could lose your job.
In a recession, companies often scale back operations as sales lag retrenchment will happen. So always prepare for the worst. Next, pull back your spending and boost your emergency fund. What? Don’t have one? Start one immediately! That’s what you will be to lean on as your income because you won’t be earning money if you’re unemployed. Otherwise look out for money making opportunity.
Anthing might happen but just handle it pessimistically and be prepared.
Enjoy reading!
Diana Lim
