A recession is a prolonged period of time when a nation'seconomy is slowing down, or contracting. Such a slow-down is characterized by anumber of different trends, including people buying less stuff, decrease infactory production, growing unemployment, slump in personal income & anunhealthy stock market.


The US, Eurozone, UK and Japan are officially in recession,in the sense of having experienced more than two successive quarters ofnegative growth. Several analysts have predicted that the rate of contractionof the US economy in the final quarter of 2008 might have been at anastonishing annual rate of 4 to 5 percent. Similar pessimism pervades the othertwo largest economies in the world: Europe and Japan. There is enormousuncertainty about the depth and duration of the current global recession. Butthe majority of expert opinion now concedes a substantial likelihood that thiswill be the worst recession since the Great Depression of the 1930s.


What about India? How bad will it get for us? With over 60percent of global GDP having toppled into recession, a significant decelerationof India's economic growth is simply unavoidable. After all, we share the sameplanet as America, Europe and Japan (and a rapidly slowing China). The official estimates of GDP growth for the first two quarters of 2008/9 stayedabove 7.5 percent. However, industry-wide indications after September areuniformly gloomy. There are reports of significant declines in output ofautomobiles, commercial vehicles, steel, textiles, petrochemicals,construction, real estate, finance, retail activity and many other sectors.Exports fell by 12 percent in dollar terms in October and advance informationpoints to a similar decline in November. After September, the economy seemsalmost to have gone over a cliff.


The Indian textile industry is majorly hit and haunted bythe global recession. As per the latest IIP (index of industrial production)data, the cotton textile sector registered a 10.6% drop in output in March 2009.The wool, silk and man-made fibre textiles category saw a dip of 8.2%, jute andother vegetable fibre textiles (except cotton) saw a dip of 1.9% and thetextile products (including apparel) category registered a 1.7% drop during March2009, according to the latest IIP data.


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The authoris associated with Technopak Advisors Pvt. Ltd.