Trade War between the United States and China, the two big giants of the world’s economy have created a havoc, also a clear indication for recession.
It seems that the ongoing Trade War between the United States and China may lead to serious consequences. Already there are indications of a severe financial crisis in many countries due to their own fiscal policies. Adding fuel to them, the China-US trade war is worsening the situation to the maximum extent.
Presently, the Gross Domestic Product (GDP) growth of the United States stands in the first place and China in the next position. In many countries the trade markets are sinking. China’s currency Yuan has already recorded a 11-year downfall amidst Trade tensions with the U.S.
United States President, Donald Trump had already announced to impose an 5% additional tax duty on the Chinese goods. Earlier China had announced its latest tariffs on the U.S goods. China with an intention to conquer the top spot in Trade has started certain measures that lead the US to counter act.
Coming back home, India stands in the 6th Place in the World’s economy of GDP growth rate. Sensing the economical situation which may lead to serious recession, Union cabinet’s Financial Minister, Nirmala Seetaraman had announced certain measures to curb the adverse affect. But the time will decide as how far these measures would protect Indian economy.
Analysts fear that, after Demonitization, India has dumped 2.80 crore jobs. On the other hand, Indian economy has furnished 2% decline in the growth rate from the date of demonitisation.
A series of incidents that are toe be noticed are – Cafe Coffee Day founder, Siddhartha has committed suicide due to the signs of recession. Jet Airways has shut down completely as there is no takeover by any of the aviation players.
Moreover, Government owned Institutions like BSNL (Bharath Sanchar Nigam Limited), one of the largest and widest Telecom operators in the country and Air India, an aviation operator are running into huge losses.
Companies who have invested in the infra structure are also facing the same heat of recession as there is a downfall in the growth rate. Real estate downfall (approx. 7%) also leads to a serious impact in economy’s slow down.
Already, the Automobile industry has announced cut-off measures to safe guard themselves from the recession. As a part of it, sacking employees has started. It is believed that a large portion of temporary staff from the Indian Automobiles well known brand, Maruti Suzuki has started sacking.
Two-wheeler Hero Moto Corp. have announced a temporary shut down of their manufacturing plants along with the TVS Group’s Auto components manufacturer Sundaram Clayton Ltd. In addition to these, many top brands have shut down their dealerships. It is estimated that nearly 200 dealerships have been already closed.
Automobile industry in India is facing a downfall, after December 2018. It has recorded a 30% loss since then. This is the worst record in last 20 years.
Coming to the FMCG (Fast Moving Consumer Goods), there is a steep downfall. One of the popular as well as below poverty line consumed biscuits company Parle-G has announced removal of around 10,000 employees from work. It holds a good reputation of supplying biscuits at affordable prices to the below poverty line consumers. it facilitates around 1,00,000 employees to work.
On the other side, one of the demanding metal in India, Gold prices have started hiking. This is one of the indications for the Indian economy for inflation. Let us hope that there might be some curbing measures from the Government of India.