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Friday, August 19, 2011

Will the world witness another economic recession

The world has moved into a precarious position, and over the
last two years, the growth witnessed in US have now again begun to recede.
United States home sales and manufacturing units have witnessed a retarded
growth, which has led many economists to believe that things could go wrong in
the economic front. The European markets too, have shown no signs of
improvement in the year 2011, and now the fear is looming large among the
economists that another global recession is on the cards.

The fall in US credit ratings has not helped either. When two
of the world's major economic regions are stuttering to come to terms with their
own economy, the world will never have a sustained growth. The world’s 3rd
largest economy has its own problems, as Japan is finding tough to deal with the
recent Tsunami after affects in its region. The loss in Japan has fuelled economic
crisis and led to the belief that economic recession is on the cards. There is
very little chance that things will improve in the near future.

European market debts are eating up European banks. They now
face a situation, where they have no choice, but have to bear higher interest
for loans that they have taken to sustain the daily activities. American home
sales continue to drop, and if the trend continues, then the economic crisis
will translate into a global recession within two years from the time it was considered
to have left.

The two years of growth after the recession has not done
enough. The most worrying factor is Europe’s inability to deal with the debt crisis.
In United States, jobs have been created, but are these jobs enough for the unemployed
people who are looking at the unemployment benefits for their daily livelihood.
The numbers of jobless people who are dependent on unemployment benefits are
rising each week, and that is a sign of job crisis. Though, the risks for a
global recession are not very high, but it could turn worse, if the current trend
continues for some more time.