Characteristics of Global Recession:
There is no consensus on or any specific definition of global recession. According to Kose and Terrones (2015), the contraction of annual global per capita GDP is known as a global recession.
According to the World Bank, since 1970 the world economy has experienced recession five times. The five periods of the global recession are 1975, 1982, 1991, 2009, and 2020. The following table shows GDP growth during global recessions.
From the above table, one can see that there was positive growth in GDP during the first three recession years but the per capita GDP (World) has declined. It is also visible that for the past two global recession periods, both GDP, as well as per capita GDP, has declined.
According to the World Bank, the decline in per capita GDP is also accompanied by slowdowns in global trade, industrial production, employment, oil consumption, and capital flows. These are highly harmonised across the globe during the recession.
Post-Pandemic Developments and Present Context
The global GDP collapsed during 2020, mainly due to the pandemic and lockdowns across the world. In 2021, the global GDP had a growth rate of 5.7%. This is the strongest growth rate after the recession pace in the past 50 years. However, the projected global growth path for 2021-23 constitutes the sharpest decline since 1970 after an initial rebound from the global recession. The overall global growth is projected to slow by 3 to 4%. This is one of the earliest slowdowns where economic activity stalled, after the recession, even before the economic activity reached its pre-pandemic level.
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