Is the recession officially ending?

On an international flight via Dubai, I was looking around at the opulence of the international airport — with increased daily flights to Europe and the US — bustling with activity, when I began wondering where the effect of the 18 months of economic recession had gone.

The 22-carat gold shops lining the airport were filled with curious customers at 7 o’clock in the morning. The airport lounge, nearly as large as the Ahmedabad airport, served unlimited five-star quality food. The lavishness of the oil countries was clearly visible: the walls were adorned with gold-plated Rolex clocks, at intervals of two feet.

Business travellers were crisscrossing continents for trade. A fellow passenger, a Pakistani, reiterated my thought, that the recession has been bad, but not as bad as predicted or feared. The US economy is now showing distinct signs of breaking out of the recession. According to a Time magazine report, the first tentative signs of a recovery are starting to appear in Germany and France, where the economies have begun growing again in the second quarter of the financial year.

In the year 2009, when the world was faced with predictions of the worst economic recession, Singapore — a tiny, 297 sq km island city-state — reports a second-quarter GDP growth of a high 20.7 per cent as compared the first quarter. Singapore, no doubt, has the advantage of its location, facilitating increased trade with China and India.

Consider the local conditions in Ahmedabad: the stock markets are doing well; the real estate market has never dropped its prices; at a recent property exhibition, the turnout was good and there were a reasonably good number of bookings. Top-end car brands such as Mercedes, BMW and Audi had their best yearend sales during Navratri and at the end of September. So, where is the recession?

Blogs have a variety of responses to the question of the recession being over. Bloggers are swinging both ways; some say it is easing or neatly over, while others vehemently deny either of these. As laypersons, we can only make certain observations on the basis of the existing situation. But there are clear signs of healthier balance sheets of families, more confident customer spending, higher rates of bank funding, while employability is improving, and higher GDPs and growth rates have been posted for the second quarter across the world.

Though the economic numbers may look bad, the ground reality is much milder. There are signs of the recession easing. But the question to ask is: is the recession officially over? It is speculated that the growth upturns of at least two consecutive quarters are safe indicators that the recession is receding. Just as economic crises do not occur overnight, but over a period of years, it will take considerable time for the effects of the recession to wash away. Economic committees will wait for a substantial period of time too, before declaring the recession finally over.