Are we moving towards another recession?
The global economic developments after Standard & Poor's (S&P) downgraded the U.S. credit rating, point towards the advent of a global economic meltdown. S&P for the first-time downgraded its long-term sovereign credit rating on the U.S. from 'AAA' to 'AA+' and kept a negative outlook.
The debt ceiling could not prevent the S&P downgrading. The historical downgrading also worsened the word economy which is already on the brink of a recession driven by the weakened U.S. financial recovery and the debt-ridden European economy.
While the debt crisis is likely to hit banking, manufacturing, real-estate and pharmaceutical sectors in the U.S., the crisis is said to cause impact to IT Sector and sectors depending on exports.
It will also result in less capital flow to the Indian economy and capital markets may face more volatility head.
Indian IT sector has also started tightening the belt and getting ready to respond to this unprecedented situation.
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