{"id":10176,"date":"2020-06-18T06:34:26","date_gmt":"2020-06-18T06:34:26","guid":{"rendered":"\/blog\/?p=10176"},"modified":"2020-08-28T13:21:06","modified_gmt":"2020-08-28T13:21:06","slug":"what-is-the-average-recovery-time-for-global-market-downturns","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/wealth-services\/what-is-the-average-recovery-time-for-global-market-downturns\/","title":{"rendered":"What Is The Average Recovery Time For Global Market Downturns?"},"content":{"rendered":"\n
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In mid April 2020, the IMF declared that the forecasted recession in the aftermath of the COVID19 pandemic would likely be the worst recession since the Great Depression of 1929-1933. . <\/p>\n\n\n\n

While most recent recessions have been caused by financial mishaps, the present scenario is the first economic downturn caused by a pandemic or global health emergency in nearly a century. The economic impacts are truly unprecedented. Not even World War II was enough to warrant the kinds of complete economic and social halts we are seeing today. <\/p>\n\n\n\n

The current outbreak is estimated to lower global production by 3% in the coming year which is a negative change of 6.4% from the figure presented in January by the IMF\u2019s World Economic Outlook Report. The Indian economy in particular, already projected to be heading towards a slowdown with a projected growth rate of 5.8% in January 2020, has fallen to a meagre 1.9% in the wake of the virus\u2019 worldwide spread. China, the source of the initial outbreak, is forecasted to grow at 1.2% in this financial year.<\/p>\n\n\n\n

Additional Read – <\/strong>Impact of Coronavirus on Global Stock Exchange Indices<\/a><\/p>\n\n\n\n

What is a Downturn and how do\nwe recover? <\/strong><\/p>\n\n\n\n

The\ndefinition of a downturn\nis closely related to GDP and can be defined as a period during which this\nfigure drops from one quarter of the financial year to the next, signifying\nnegative growth. If this occurs for two successive quarters, the period is\ndeclared as a recession. Some other measures of a recession are growing\nunemployment rates, declining production and negative consumer attitudes. On\naverage, the past 14 recessions\nhave lasted for a period of 403 days with the Great Depression being the single\nlongest economic downturn over\nthe past 100 years at 1,307 days or just shy of 3.5 years.  <\/p>\n\n\n\n

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(Source:Forbes)<\/p>\n\n\n\n

Recessions have also generally been\nfollowed by periods of expansion, as part of the global economy\u2019s periodic\ncycles of activity. These periods of expansions have varied over the years,\nranging from 1 year after the 1980 recession to nearly 10 years after the 1991 recession.\nOn average, these periods have lasted around 4 years considering data from the\nabove infographic. While it may be useful to consult past events for guidance,\nthey cannot always be considered an accurate forecast of things to come.<\/p>\n\n\n\n

Additional Read – <\/strong>Investment Predictions by Wealth Managers for a Post-pandemic world<\/a> <\/p>\n\n\n\n

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Types  Of Recovery:<\/strong><\/p>\n\n\n\n

Recovery from recessions may take place in the form of one of the following growth curves:<\/p>\n\n\n\n