I agree but first u must understand word recession means when economic growth turned to be zero or below zero means negative. After covid 19 I don't see any global recession but I see growth in all economies of world including Pak and US don't feared the world layoffs u read every day on paper these are temporary what happens when a company pay to salary some money goes into Employment insurance in case you lost ur job the EI kicks in about six months to feed U time u get another one in current senario companies doing temporary layoffs means they saving money when things will get back to normal they will call U again and also Govt giving stimulus means tax credits to companies this happened to US and Canada in EU and Nordic countries they took other route like Demank and Norway Govt rolled 75% salaries to employers so ppl stay home for month or two so no layoffs there they froze theior Economies.
I don't see any recession beacuse things gona pick up very quick beacuse at the moment we are at pause kind of situation.
For US investment about 5 Billion is another stimulus to LM F16 branch jobs and local industries we continue to flourish this covid is Max another month not more than that for Pk paying extra 300 million shouldn't be a problem it's win win for both countries
Canada giving about 90 Billion stimulus over Covid 19 and only this Yr Govt of Canada hoping tax returns about 60 billion so what they giving about 30 billion they will take back that 30 too within yr again US giving 6 trillion look at theior size and economy?? IN a year they will take this money back from ppl by taxes US has very low tax regime if they raise. 5% they can fetch out this money in a year or two.
Dear I don't want to act as pessimistic but I am not much hopeful
if situation does not become stable in maximum one month then globally we are heading for a Recession, in simplest way I will try to explain the current situation as
- Currently demand specially in consumer segment is falling
- It is not just because of temporary layoff due to pandemic, but even after pandemic common pattern of demand will not remain same as it was earlier and general consumer, business and governments would increase their expenditure related to health as current pandemic has exposed heath sector of every country.
- Though all the business related to health would see growth but the issue is Health is a highly technical sector and it would not be able to accomodate general workers.
- Another sector which may see positive trend would be ICT again a very technical sector with comparatively limited job opportunities for small segment of job market, so in both cases
unemployment rate would be high
- At Government level when expenses would increase with decrease income [both Tax and non-tax based] Governments all over the world will be forced to
Reallocate the Resources by cutting expenses from other sectors.
- Due to the decrease in demand in many sectors confidence of investors in those sectors would be shaken, they too would face a situation where they might have to take the decision of extreme cost cutting or to disinvest in both cases it will affect job market and income of general consumer.
- Now here recall the Trade war which may increase after pandemic b/w the countries to safeguard their domestic economy and to create job opportunities in domestic market
- Decrease in Demand and Trade wars may force business to reduce prices to increase the demand which may trigger
Deflation
- Low Oil prices is also another factor which this time if not handle properly would affect negatively as it will effect Renewable Energy and Shale Oil and Gas Industries, on the other hand it will decrease the revenue of oil producing countries specially in Middle East where foreign labour from many countries are employed.
- Decrease of income due to low oil price and increase of expenses due to multiple war in Middle East would negatively affect both eastern and western countries as Middle east is a big consumer market for the western goods and services and it is a valuable source of Foreign Remittance of many developing Asian countries.
So in short due to the factors stated below:
- Reallocation of Resources
- Decrease of Demand [due to many factors]
- High Unemployment Rate and
- Deflation
Global Recession will be Triggered If somehow we fail to control the unemployment or maintain [ideally increase] the demand Globally.
