Saturday, March 28, 2020

Is a recession due to the coronavirus inevitable?

First things first: what is Recession? “In economics, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending.”
What keeps an economy buzzing? It is the consumer; and a positive consumer sentiment that motivates us to shop for new cars, houses , household stuff and services.
Consumers are humans. With the #COVID19 induced barrage of news, uncertainty, and lockdowns humans around the world are feeling overwhelmed. The consumer and business sentiment is far from positive. Check out United States Consumer Sentiment index
The global economy is already in recession. Why do you think the governments around the world have stepped up with bailout plans? (ref: The bill for saving the world economy is $7 trillion and rising).
Let’s look at the light at the end of this tunnel: Humans are resilient when facing uncertainty. Recessions eventually lead to extended periods of growth. We will certainly get past this economic slump.