America’s economic slowdown has weighed heavily on the tech sector around the world. According to recent reports, the jobs of 1 lakh 30 thousand employees across the world have been cut off this year. Big names like Cisco, Intel, Microsoft have issued pink slips to their employees. It is a matter of concern that this series of layoffs does not seem to be stopping in the coming days.
The reason for saying this is that fears of recession in America have started increasing, due to which clouds of crisis are looming over the global economy. Apart from IT, many sectors other than IT can be affected in India also. In fact, there are signs of weakness in many major economic indicators in America. Unemployment claims have increased significantly from the low level in January and the unemployment rate rose to a three-year high of 4.3 percent in July. Apart from this, Manufacturing PMI has fallen to its lowest level in 9 months.
Mixed signals in America
Meanwhile, the American economy has also shown signs of recovery from recession, prominent among which are. Increase in GDP growth estimates for the July-September quarter from 2.6 percent to 2.9 percent, salary hike being higher than inflation rate and increase in house prices. That is, if seen overall, the American economy is giving mixed signals due to which it is difficult to say whether the economic slowdown there will turn into a recession or not. Meanwhile, there was a lot of volatility in the American stock markets due to fear of a possible recession. Market expectations have increased since the US Federal Reserve indicated interest rate cuts in September.
Many sectors of India will be affected!
But if the situation does not improve and the American economy goes into recession, then India will also be affected in which demand for Indian exports may decrease due to decrease in demand in America. IT, pharma and textile sectors are heavily dependent on the American market. Apart from this, economic recession causes disruption in the global supply chain, which can make the situation more challenging for Indian exporters.
Along with this, recession in America will reduce the confidence of investors across the world which may lead to reduction in FDI in India. However, in such a situation, there may be a fall in the prices of crude oil which will be beneficial for India. In such a situation, its domestic demand, large export basket and strong financial position can definitely prevent India from going into recession.