The holiday season is about to begin. Before you make any impulsive purchase, we are here to remind you that there are clouds of recession around the world.
Let’s explore what you should do in such situations!
Finally, the holiday season - December is about to begin. Companies are setting up the tables by sending marketing e-mails, restaurants give discount coupons, and people wishlist their favourites to buy this holiday season.
Even if the scenario is the same, a few things are different this year. The economies worldwide are slowing down, layoffs are taking place at an alarming pace, prices of raw materials and commodities are hiking, and many countries are in recession while others are on the verge of recession.
So, let’s find out if you should indulge in the blossoms of the holiday season or save for the time ahead.
What’s happening?
Western countries like the United States, Canada, the European Union, United Kingdom have experienced a slowdown. Their GDP has declined for two quarters. According to Nomura, other countries like South Korea, Japan, and Australia may also dip into recession.
These countries are on the verge of a recession because their central banks have tightened their monetary policies. On the other hand, commodity prices are rising, leading to expensive products, so people have to spend more to maintain their standard of living.
The world’s largest economies have the dominion power to make or break the global economy. Hence, if they dip into recession, they will drive the global economy into recession too.
Which countries will recession blow on first?
According to Bloomberg, Germany - Europe’s biggest economy, will shrink more than any other eurozone member in 2023. Moreover, the UK economy is already in a recession. The country’s economy shrank by 0.2% in the third quarter of 2022. Hence, the downturn is expected to worsen in 2023.
According to NDTV, Sri Lanka, Russia, Belarus, Argentina, Ukraine, Egypt, Kenya, Ethiopia, Pakistan, Nigeria, and a few more countries are going through an economic storm and are in a danger zone!
Will recession touch India as well?
Wondering where does India stands in the recession talks? According to Moody's, India is headed for slower growth next year, more in line with its long-term potential. It has projected a growth rate of 5% in 2023, which in the current year was 8%.
How can you save yourself from the turbulent times of slowdown?
First, understand your finances, cut unnecessary expenses and spend wisely. Save as much as possible and invest it somewhere to earn inflation-beating returns.
As inflation is at its peak, you must invest in an asset which offers inflation-beating returns, like equity markets. If you wish to invest in equities, Teji Mandi can help you do so.
