There were several speculations from economists that the global recession might happen again in 2020. According to the United Nations Conference on Trade and Development (UNCTAD) as reported by the News Straits Times, it seems that the world economy is heading into troubled waters, with a recession in 2020 now a clear and present danger. There have been some discussions going around social media platforms regarding the global recession in 2020 and whether a developing country like Malaysia is heading towards the said recession.
As reported by The Asean Post, the country’s central bank; Bank Negara Malaysia (BNM) has recently announced that Malaysia’s economy grew by 4.9 % in the second quarter of 2019, compared to the first quarter which was 4.5 % thus indicating that our country’s economy is doing better than expected. The economy grew tremendously as it is being supported by higher net exports, increased household spending and private investment, according to BNM Governor Nor Shamsiah Mohd Yunus.
However, it is best for us to always be prepared for the inevitable impacts of global recession.
The Impacts of Global Recession
The impacts of global recession vary widely across developing and major countries, however, it does have an enduring impact on a variety of aspects. Some countries recover quickly but some aren’t thus it is crucial for the government to come up with a plan to counter back the possible impact. Below are several impacts of global recession:
1. Rising unemployment
It is most certainly that unemployment will become one of the biggest challenges caused by the global recession that may reduce income or economic opportunity. Based on recent research, college graduates will be the most affected since they will earn less than the people entering the workforce before the recession happens. As a matter of fact, the ones that have less education certificate and those that possess lower incomes will also affected greatly during a recession.
2. Educational attainment
Education plays an important role in driving economic growth. As unemployment issue rises, educational attainment then becomes affected. During a global recession, most families will face financial difficulty. Therefore, there is a higher chance that families will struggle and are forced to delay plans that they have to send their children for a proper education. This thus results in substantial consequences for years to come.
3. Decreasing in export revenues
Global recession will affect a country’s export revenue greatly, especially for developing countries due to lower demand and falling prices for commodities, including the demand for manufactured goods. This also causes much slower business formation and expansion as customers will spend less during a recession. The impact of delaying one business can create a ripple effect across a wider range of other businesses.
4. Global tourism
Tourism serves as one of the huge sectors in the economic growth of a country. According to the economic and financial reports, the demand for hotel stays will declined immensely and hence affected the global tourism revenues negatively during a global recession.
5. Private investment
Recognised as the major contributors to economic growth by fellow economists, the global recession will lead to fluctuations in investment spending and the adoption of new technologies. This issue might possibly be caused by a drop in demand for products due to lack of income, retrenching production of products, including limited access to credit will eventually lower the possibilities of companies to invest.
Overcoming Global Recession
How would you as an individual or those with families to overcome such tough times during a recession? Having a strong will alone won’t be enough but with adequate preparation, one can emerge from the recession stronger than ever. Here are some ways that you can do:
1. Prepare emergency savings
Job loss is inevitable during a recession and this means you will have a difficult time paying your day-to-day expenses without proper emergency savings. You might think that you’re still have a long way to go, but the savings will make it possible for you to afford your necessities. It is best to boost your emergency savings for up to three to six months’ worth of spending.
2. Pay off debt
Some individuals are very disciplined towards paying off their debt, but some always find a way to stall the process. However, stalling to pay off debt during a recession is never a wise choice. Try to reduce your debt as it will help decrease your monthly expenses and gives you a better chance to survive the global recession if you so happen to be retrenched or lose your job.
3. Live below your means
Global recession might not be the case for you to live within your means but instead, try to instill live below your means to avoid overspending. You may need to create a tight budget for your monthly expenses and necessities that include rent, all sorts of insurance, bills, etc.
4. Additional income
Each one of us employees is aware that retrenchment is possible and what’s the best way to overcome this than to have an additional side income to support your expenses during a recession? You can do any sort of side income that pays well ranging from online businesses, driver for rideshare services and many more. Here are some of the side jobs that pay well here in Malaysia that you can consider.
5. Widen your investments
Stock prices during the global recession usually will fall drastically and this may be your chance to widen your investments. Among some of the worthy investments during these times that you can consider are investing in real estate such as land or apartments as the value will keep rising over time, even in a recession.
With the prediction of the global recession in 2020, how would you as an individual or those with families overcome this tough time? Let us know your thoughts in the comment section below. Follow Jobstore.com to unveil your next job opportunity.
Nurin Eznieka is a digital content writer who writes about lifestyle, tips and tricks, including career-related contents both in Malay and English languages. Nurin is a foodie who enjoys food hunting and cafe hopping during her free time.
Reach me at: firstname.lastname@example.org