Journal Press India^®

The world is currently facing the severest global recession and credit crunch since the Great Depression of 1930s. The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and latest until the late 1930s or early 1940s. It was the longest, most widespread, and deepest depression of the 20th century, and is used in the 21st century ns an example of how far the world's economy can decline. The depression originated in the United States, starting with the stock market crash of October 29, 1929 (known as Black Tuesday), but quickly spread to almost every country in the world. The current crisis also originated with sub-prime crisis in the United States of America.

Julius Shiskin suggested in a 1974 New York Times article, several rules of thumb to identify a recession, which included two successive quarterly declines in gross domestic product (GDP), a measure of the nation's output. This two-quarter metric is now a commonly held definition of a recession. In the United States, the National Bureau of Economic Research (NBER) is regarded as the authority which identifies a recession and which takes into account several measures in addition to GDP growth before making an assessment. In many developed nations other than USA, the two-quarter rule is also used for identifying n recession.

Defining a global recession is more difficult as compared to recession of one nation, because developing nations are expected to have a higher GDP growth than developed nations. The IMF estimates that. global recessions seem to occur over a cycle lasting between 8 and 10 years. During what the IMF terms the past three global recessions of the last three decades, global per capita output growth was zero or negative. A global recession is a period of global economic slowdown. The International Monetary (IMF) takes many factors into account when defining a global recession, but it states that global economic growth of 3 percent or less is equivalent to a global recession". By this measure, three periods since 1985 quality: 1990-1993, 1998 and 2001-2002.

According to IMF, the real GDP growth of the emerging and developing countries is on an uptrend and that of advanced economies is on a downtrend since late 1980s. The world growth is projected to slow from 5% in 2007 to 3.76% in 2005 and to just over 3% in 2009. Downward revisions in GDP growth vary across regions. Among the most affected are commodity exporters, and countries with acute external financing and liquidity problems. Countries in East Asia (including China) have suffered smaller declines because their financial situations are more robust. They have benefited from falling commodity prices and they have initiated a shift toward macroeconomic policy easing. In the second half of 2008, the world economy came to a halt. On an annualized basis, global GDP growth slowed to 2 percent after averaging 5 percent over 2003-07. World trade flows collapsed in the last quarter of 2008, with global exports projected to decline in 2009 for the first time since 1982. GDP in rich countries is projected to contract by 3.8 percent in 2009, as against 0.9 percent growth in 2008 Growth in developing countries is projected to slow to 1.6 percent in 2009, compared with 6.1 percent growth in 2008.

The good news is that global recession is ending and the world has become more smarter and learned lot of lessons in the process. The eleventh annual international seminar scheduled to be held from Jan. 4 to 5, 2009 at New Delhi, on the main theme: "Global Meltdown or Recession: India vis-a-vis Rest of the World" is the appropriate forum to discuss the finer details. All of you are invited to share your thoughts in this mega event.

DBR has also achieved a milestone of providing quality service from last 10 years for which all of you deserve congratulations. I wish you all a very happy, prosperous, and peaceful new year.

Ajay Kr. Singh