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National Seminar Ppt

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Page 1: National Seminar Ppt
Page 2: National Seminar Ppt

GLOBAL ECONOMIC MELTDOWN

“Repercussions, Challenges and Reforms”

IMPACT ON TRADE, INDUSTRY AND BANKING

SECTOR

Page 3: National Seminar Ppt

The Economic Heat The large outsourcing company

Wipro dismissed 2.5 percent of its work force in the second quarter.

Interest rates jumped from 6% to 15% making impossible for businesses and households to service their bank borrowings

“Liquidity crises" in the market.

The Jordanian capital Amman is facing the brunt of the meltdown and preparing for the worse.

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It's a recession when your neighbor loses his job; it's a depression when you lose yours.

Harry S. Truman

Page 5: National Seminar Ppt

The Global Economic Meltdown Economic recession is an

indicator of an economic downturn

A recession is a prolonged period of time when a nation’s economy is slowing down, or

contracting. This slow-down has to

continue for at least six months to be considered a recession.

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The Business Cycle

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Its Effects Includes high oil prices which led to drastic high food prices

A substantial credit crisis leading to the drastic bankruptcy of large and well established investment banks and commercial banks

Increased unemployment

Slump in personal income

An unhealthy stock market

“Recession – The ultimate Financial Checkpost”

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IMPACT ON TRADE, INDUSTRY AND BANKING SECTOR

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Trade – The World Connector Trade is the willing exchange of

goods, services , or both

The original form of trade was barter, the direct exchange of

goods and services.

Types - Bilateral and

Multilateral

Various Innovations in Trade

Page 10: National Seminar Ppt

Significance of Trade Trade promotes peace among nations It encourages exchange of ideas and encourages new inventions. For example,

China or any other country does not need to reinvent light bulbs. Increasing global trade encourages small countries to adopt the language of a larger

trading bloc

Factor price equalization Increase in GDP of a nation More Trade, Less poverty Promotes Industrial growth

Page 11: National Seminar Ppt

Meltdown in Trade The Great Depression was a

major economic recession that ran from 1929 to the late 1930s, where a drop in trade and other economic indicators.

The nation's trade deficit fell in December to a six-month low of $6.25 billion

The China-U.S trade gap was $25.9 billion in October

The trade deficits of recent years, which peaked at 5.8% of GDP in 2006

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The Indian Side-effects Decline in export growth to negative 9.9%

is a reflection of coupling of Indian exports with global slowdown

Recession Infects the Indian Textile Industry since almost 50% of the total textile production is being exported to US and EU.

India's merchandise exports during October were valued at $12.8 billion, 12 percent lower

India 2007 Gold imports seen at record levels (A positive impact)

Oil imports during December 2007 were valued at 5.96 billion dollars, u 23.78 per cent from 4.81 billion dollars in

2006.

Page 13: National Seminar Ppt

Industrial Sector: The Needs Producer An industry is the manufacturing

of a good or service within a category

Secondary Sector, which is a type of economic activity involved in the manufacturing of raw materials into goods and products.

Key Industrial Sectors Primary sector Secondary Sector Tertiary Sector Quaternary Sector Quinary Sector

Page 14: National Seminar Ppt

Industrial Meltdown: An Impact Recession trickles India’s Tech Industrial

Outsourcing Industry on the edge- Wipro dismissed 2.5 percent of its work force Chemical Industry on the Decline A pang in the Employment

Page 15: National Seminar Ppt

Banking Sector: The Money Circulator A banker or bank is a financial

institution whose primary activity is to act as a payment agent for customers and to borrow and lend money.

conducting current accounts for his customers

paying cheques drawn on him, and

collecting cheques for his customers.

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The Money that Never Was

You earn a salary of Rs.50,000 Buy a house worth 20 Lac Assume that you will sell the

house at 40 Lac and make a 100% profit

Not able to pay monthly EMI of Rs. 8,500

Sell the house at a loss File for Bankruptcy

“Money is the Creator of Profit and

Destroyer of the same”

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Weakening of the US Dollar

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Modern Day Banking in Trouble Merrill Lynch and Citigroup – borrowed funds from Asia & Middle East to the

tune of $6.6 Billion and $14.5 Billion respectively to cover financial losses. The Great Fall of Lehman Brothers: Banks lead fallers in London's worst day in

years FTSE 100 index falls more than 5% Reserve Bank of India Raises Interest rates: Repurchase rate lifted to 8.5 percent

from 8 percent, and cash reserve ratio to 8.75 percent from 8.25 percent.

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Global Economic Slowdown: A Boon or A Bane?Boon: India's provisional gem

and jewelry exports increased by 22.27%

Manufacturing production is expected to increase 1.9 percent

Servive sectors grow faster during recession

Bane: American International

Group (AIG) - $5 Billion loss

More than 200 troubled banks are likely to be purchased before they reach the point of failure.

A great hurdle for the IT Industry

Result of Crashing Oil prices

Page 20: National Seminar Ppt

First Hand Information Shasun Chemicals & Drugs Ltd,

Chennai: “The high commodity prices during

the 1st 10 months of calendar year 2008did impact our margins

focusing on cost management, working capital improvements and growing our research and formulation business

We also expect the RBI to bring down the foreign currency volatility”

Page 21: National Seminar Ppt

The Way Out of the Labyrinth- A Solution Increased subsidies by the Government for

promotion of Exports Promotion of Increased Industries in

Service sector Constant check on devaluation of

Currency Don’t bite off more than you can chew Save at least 5% of the monthly income Wipe out credit debts

Page 22: National Seminar Ppt

Conclusion

As a fall in the ditch would make us more cautious, similarly the Global Economic Meltdown has made the World Economy to arise, in spite of its drastic impact. The recovery of the affected sectors – Trade, Industry and Banking has been proved rapid and expected to ensure economic wealth.

Page 23: National Seminar Ppt

By,

Vaishnavi.K Bhavani.K

Sri Arabhi.G