A discussion about the phase of the economy is round the corners. Will it be recession or depression? Is the economy entering into recession phase? Well, the International Monetary Fund (IMF) defines a recession as the period in which the global economy grows less than 2 percent in a year. However, it characterizes global depression as the phase in which the major economies of the world decline. Further, the reduction is by more than 10% for more than two or more years.
Recession phase alarm has become a significant problem. Governments are trying to get rid of this. All the major economies like the United States, United Kingdom, Germany, Japan, China, France, etc. are worried. Moreover, these economies are announcing more relief funds and resources in response to the growing global financial crisis. The question arises; will they succeed with these relief measures?
The harm caused to the economy by pandemic coronavirus is terrible. It began with disruption of supply and quickly affecting the demand factor. The significant dent to the economy comes due to safety measures taken by the government. Due to these preventive measures, cities are under lockdown. People are avoiding going out to avoid contact. All economic activities involving people are at a halt. The best way to stop the global economy reaching into recession phase is the survival of the businesses. The government should make every possible effort to support the business sector. They should get relief like tax holidays, reduced loan rates, easy financing of loans, and moratorium periods. The earlier the businesses will bounce back, the more it will be good for the global economy.