Do you really think we are coming out of recession due to the data ( Financial one) shown by these agencies as the situation on ground is still far from normal ?
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Nikhil J
Analytic Problem-Solver with International Experience
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I believe that we're got a bit to go and we're not out of it yet. Here's why.
The US had big partnerships with India and China who only have only recently felt the decreased demand (as orders are often placed months or a year in advance for suppliers). These economies are not going to be able to purchase the same level of services as they were a year ago. So this after-shock effect of the India, China (maybe Brazil as well), is going to hit the US.
Typically recessions comes in several waves.. i.e. a big hit, and then several "waves" bouncing back and forth, with lagged effects. While we are coming out of it in the US, we're only recently seen one or maybe two waves. The big effect of an India/China shock is likely yet to come.
That being said, I do believe we've bottomed out, and we're on our way up, but it will not be a steady climb because of the above economic effect.
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Yes we are coming out of recession.
If we go by the books, then the latest signs do suggest that things are getting better. Economies which were hit pretty bad by the meltdown such as Germany and Japan have shown marginal growth in GDP in the last quarter. For emerging market such as Indian and China which were expanding over 9 % till last few years have only hit a speed breaker. After witnessing carnage in most of the world economies, our GDP could still manage to grow over 6 % in the recent fiscal. Agreed we saw some dwindling IIP figures for a period but it has revived quite well to say the least now. Ample supply of liquidity in the past few quarters helped by the rate cuts has helped major sectors such as autos, consumer goods post healthy growth. The only major concern according to me right now would be the dwindling exports and inflation figures which are expected to rise again. Then again, it also depends how quickly US economy recovers. For me, Its the fear of downfall which seems to be prevalent among people now more than the downfall.
The situation has still not achived the expected point but its getting better. Last year the situation was horrible but this year atleast the openings have started . Well, it will take more time may be an year more to arrive the normal point.
Ken R
Financial Advisor at Morgan Stanley Smith Barney
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Yes, the general indications are we are emerging out of this recession but nothing is guaranteed. Keep in mind many of the indicators are what is known as leading indicators. These are positive signs that generally point towards a particular future outcome but they do not predict them 100%.
They also do not predict what type of ride we will experience along the way. Could we dip back into recession (double dip recession), will growth be robust or relatively flat in the near term, could other future events put a hamper or reverse a strong recovery (terrorist attack, etc.).
My gut feeling is we are emerging from the worst of the recession but with a much bumpier ride going forward and slower growth overall. A number if items can have a significant impact on future growth such as rising interest rates, increased taxes, continued unemployment, slow growth in consumer spending, etc. so in my opinion some reasons for cautious optimism.
