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Explainer: Is there going to be an economic recession in the world? Know the signs till the layoffs of companies due to fear of inflation

Fear of Recession: Is there going to be a recession in the world? Inflation has skyrocketed in the last few months. From the price of petrol, diesel to the prices of food items or anything else, inflation seems to be going at its peak. However, the question is arising whether inflation alone is responsible for the economic slowdown? If it is not so, then why is the question of recession arising, it is being tried to understand here.

What is an economic recession?
When the growth in the economy stops for some time continuously, employment decreases, inflation starts rising and the income of the people starts decreasing, then it is called economic recession. There has been economic recession 4 times in the whole world. The first time in 1975, the second time in 1982, the third time in 1991 and the fourth time in 2008, there was economic recession. Now it is being feared for the fifth time.

World Bank said – countries should prepare for economic recession
It has been said by the World Bank that by the end of this year, the economic progress of the world is expected to decrease, so most countries should prepare for an economic recession. The whole world is struggling with high inflation and low growth rate, due to which there may be a recession like the 1970s. Its effect is also visible across the world.

Where is the effect of the fear of economic recession beginning to be seen?
Google’s parent company Alphabet has said that it will slow down the recruitment process in the remaining months of this year. This is being done in view of the possible slowdown in the coming months. In an email sent to the company, CEO Sundar Pichai has said that in 2022-23, the company’s focus will be only on engineering, technical specialists and recruitment in important positions. The process was stopped.

Apart from Google, these giant companies are also cutting recruitment
For information, let us tell you that not only Google but also Facebook will recruit only 6 thousand to 7 thousand new engineers in 2022 instead of the target of 10 thousand. In view of the possible slowdown in 2022-23, Microsoft has also decided to cut recruitment.

Why is there a recession in the world, here are the signs
Inflation in America has reached 9.1 percent, which is the highest in the last 40 years. In the United Kingdom too, inflation has reached the highest in 40 years, reaching 9.1 percent. In the European Union too, the inflation rate has reached 7.6 percent. At present, 20 and a half crore people in the world are expected to be unemployed. Before the start of Kovid in the world, 18 crore 70 lakh people were unemployed in 2019. That is, the signs are clear that both inflation and unemployment are increasing in many countries.

Why was there a recession in the world?

primary reason- When Kovid came in 2020, there was a lockdown all over the world, due to which the growth rate of the economies stopped. Millions of people became unemployed due to the lockdown. When the lockdown opened, the supply chain of goods shipped from China came to a halt. If the supply decreased, then the demand for things increased worldwide, due to which inflation has increased.

other reason
Russia attacked Ukraine in February 2022, affecting the supply chain of food and oil around the world. If crude oil becomes expensive, its direct effect has also been seen on inflation. Now to deal with inflation, the world’s central banks are increasing interest rates and when banks increase interest rates, foreign investors have withdrawn money from the stock market. When foreign investors withdraw money, the direct effect came on the currency of that country, as India’s rupee is continuously falling.

If we look at the direct relation of the recession in the world, then this Kovid-Lockdown-The pace of the economy stopped-Unemployment increased-Supply chain stopped-Demand increased-Inflation increased. In this way, it has become a cyclical chain and many countries of the world are seen coming in its grip.

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