recession 2023 Archives

Here are some of the major updates that could move the markets tomorrow:

India’s manufacturing PMI rises to 13-month high in Dec

India’s manufacturing sector recorded its sharpest growth in output in 13 months in December 2022. The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) stood at 57.8 in December, compared to 55.7 in Nov. New orders rose at the fastest pace since February 2021 even though selling prices surged more than input costs for the first time in two and a half years.

PMI is a month-on-month calculation, and a value above 50 represents an expansion compared to the previous month.

Read more here.

Auto sales data for Dec 2022: Highlights

Maruti Suzuki India posted a 9% year-on-year (YoY) decline in total sales to 1.39 lakh units in December 2022. Sales of its compact vehicle segment fell 21.5% YoY to 67,267 units. Exports fell 2.2% YoY to 21,796 units.

Tata Motors Ltd registered a 10% YoY increase in total sales to 72,997 units in Dec. The automaker’s commercial vehicle sales fell 0.6% YoY to 33,949 units. Overall passenger vehicle sales rose 14% YoY to 40,407 units.

Mahindra & Mahindra’s passenger vehicle segment posted total sales of 28,445 units in Dec, an increase of 61% YoY. M&M’s tractor sales rose 27% YoY to 23,243 units.

TVS Motor Company’s total sales stood at 2.28 lakh units in Dec, down 3% YoY. Meanwhile, Bajaj Auto’s sales fell 22% YoY to 2.81 lakh units.

Read more here.

India’s electricity consumption grows 11% to 121.19 BU in December

Power consumption in India grew 11% YoY to 121.19 billion units (BU) in December 2022. This indicates the sustained momentum of economic activities last month. Reports indicate that power consumption and demand will further increase in January due to the use of heating appliances (especially in the north) and a further improvement in economic activities.

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SBI, ICICI Bank, HDFC Bank remain domestic systemically important banks: RBI

The Reserve Bank of India (RBI) said the State Bank of India, ICICI Bank, and HDFC Bank continue to be identified as Domestic Systemically Important Banks (D-SIBs). D-SIBs are interconnected entities whose failure can impact the whole financial system and create instability. The current update is based on the data collected from banks as of March 31, 2022, the RBI said.

Read more here.

CIL’s coal supply to power sector rises 11% to 433 MT in April-Dec

Coal India Ltd’s (CIL) coal supply to the power sector rose 11% YoY to 432.7 million tonnes (MT) in the April-December period of the current financial year (FY23). The supply to the non-power sector last month was 10.5 MT due to increased output. The company supplied close to 508 MT of coal to all-consuming segments in April- December, registering a growth of 5.4% YoY. CIL accounts for over 80% of India’s coal output.

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Tea industry facing multiple challenges in wake of Covid pandemic: Experts

The tea industry in India is struggling with low prices and high input costs due to the damages caused by the Covid-19 pandemic. Production has also been declining from 1,390 million kg in 2019 to 1,258 million kg in 2020, 1,329 million kg in 2021, and 1,050 million kg till October 2022. Stakeholders within the industry are calling for more focus on quality and boosting exports.

Read more here.

Recession will hit a third of the world in 2023, warns IMF chief

A third of the global economy will be in recession this year, said International Monetary Fund (IMF) chief Kristalina Georgieva. 2023 will be “tougher” than last year as the US, European Union (EU), and China will see their economies slow down, she added. Global growth is forecast to slow from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023.

Read more here.

JSW Group plans to foray into EVs

JSW Group is considering a foray into the manufacturing of electric vehicles (EVs), said Group Chief Financing Officer Seshagiri Rao. The group is looking to manufacture four-wheelers. The EV manufacturing plan is being discussed actively at the group level, he said while revealing JSW Group’s aim to expand its presence into more sectors.

Read more here.

Dabur acquires a 51% stake in Badshah Masala

FMCG firm Dabur India has completed the acquisition of a 51% stake in Badshah Masala Private Ltd for Rs 587.52 crore. Badshah Masala manufactures, markets, and exports ground spices, blended spices, and seasonings. Dabur will acquire the remaining 49% stake over the next five years.

Read more here.

PSP Projects emerges lowest bidder for ₹1,364 crore govt project

PSP Projects Ltd has emerged as the lowest bidder for a government project worth ₹1,364.47 crore in Surat, Gujarat. The company will construct a high-rise office building for Surat Municipal Corporation. PSP Projects is a multi-disciplinary construction company that engages in industrial, institutional, and residential projects in India.

Read more here.

APL Apollo posts 50% growth in sales volume in Q3

Structural steel tube company APL Apollo Tubes Ltd. registered its highest quarterly sales volume of 6,05,049 tonnes in the quarter ended Dec (Q2 FY23), showing a 50% YoY growth. The sales volume for the first nine months of the current financial year rose by 35% to 16,30,120 tonnes. APL Apollo Tubes operates 11 manufacturing facilities with a total capacity of 2.6 million tonnes.

Read more here.

2022 was a rollercoaster of a year for the global economy! Most sectors had just started showing signs of recovery after two pandemic-hit years. Unfortunately, Russia’s invasion of Ukraine, a cost-of-living crisis triggered by inflationary pressures, and the slowdown in China have hurt economic sentiments again. As we approach 2023, there are talks of an economic recession heading our way.

In today’s article, we’ll discuss what a recession is, whether we’re really in one, and how we can deal with it intelligently.

What is a Recession?

A recession is a prolonged period of economic downturn. It’s typically indicated by a fall in the gross domestic product (GDP), an increase in unemployment, and a decline in consumer spending. GDP is the total market value of all the finished goods and services produced within a country’s borders during a specific period.

Economists generally agree that a technical recession happens when the real GDP growth (or inflation-adjusted GDP) declines for two quarters consecutively. It can be caused by a decline in consumer confidence, a fall in business investment, or an increase in interest rates. [When interest rates are hiked or the cost of borrowing rises, people will have to pay more to repay debts, thereby reducing their purchasing power. There will be less money in the hands of people to spend, and thus, businesses get less revenue.]

So during a recession, businesses may struggle to stay afloat. It can be difficult for people to keep their jobs or find new ones. Governments may have to provide extra support to citizens and businesses through financial assistance or stimulus packages. Like most countries, India entered a recession in FY21 due to strict lockdowns imposed by the government to curb surging Covid-19 cases.

Will There Be a Recession in 2023?

Many financial experts and institutions (including the Centre for Economics & Business Research) have predicted a global recession to begin in 2023. WHY? Well, multiple factors such as rising interest rates (to curb inflation), trade tensions, and global political uncertainty can contribute to a prolonged economic downturn.

In fact, the International Monetary Fund’s (IMF) annual economic forecast has predicted sluggish global growth in 2023. It gives attention to three issues: Russia’s invasion of Ukraine and its impact, the long-term effects of the Covid-19 pandemic (especially in China), and high inflation & tight monetary policies. We could be paying the price for trying to bring down inflation to more comfortable levels!

Impact on the Stock Market

Stock prices tend to fall during a recession as companies struggle to maintain profitability and investors quickly withdraw their funds from the market. Such a bear market can help you buy stocks of fundamentally-strong companies at cheap prices! You could essentially take a look at your investment portfolio now and make the necessary adjustments for such a scenario.

How to Deal With a Recession in 2023:

Now, many of you might be freaking out about losing your jobs and life savings. But don’t panic! Here are some simple tips for surviving a recession in 2023:

Build an emergency fund: We can’t stress how important this is! An emergency savings fund can provide a buffer against unexpected job losses, expenses, and other financial setbacks that may occur during a recession. Aim to save up to 4-6 months’ worth of living expenses, or more if possible.

Manage your debt wisely: High levels of debt are like having a giant weight strapped to your back during a recession. They’ll make it harder to stay afloat if your income takes a hit. So pay down as much debt as possible before the recession hits, and prioritize the debts with the highest interest rates.

Cut unnecessary expenses: Look for ways to reduce extravagant expenses (such as dining out) and find ways to save on necessities like groceries and utilities.

It may become necessary to explore alternative sources of income to help make ends meet during a recession. Consider taking on part-time or freelance work or starting a side hustle. You could even learn to trade and make money consistently from the stock market! (Visit marketfeed.com 🚀)

Seek financial assistance: If you’re struggling to make ends meet during a recession, don’t be afraid to ask for help. There are government programs and other resources that can provide financial assistance, such as unemployment benefits and food/grocery stamps.

Keep an eye on economic conditions and be ready to adjust your financial plan whenever required. This includes reassessing your budget, adjusting investments, or finding new ways to generate income.

These are just a few pointers on our survival guide for the next recession. It may not be an easy ride for many. But with a little bit of preparation and some flexibility, you’ll be able to weather the economic storm and come out stronger on the other side!

Are you prepared to face an economic recession? Let us know in the comments section of the marketfeed app!