Three reasons why some sort of repeat of 2008 is a real possibility now
The first reason why we may have a big global recession is the decline of China. It's purchasing and consuming power, one learns from various sources, is coming down. Japan is stagnating as the percentage of young people in that country is not considerable at all and old age pensions might become a big draw on its resources. And when the US dollar is strengthened, it's imports will become cheaper but exports of other countries might take a big hit.The second major reason is the stagnation in global markets. When the demand is down , people will not spend money but save it. The third main reason is the emergence of cheaper substitutes and the work from home culture, post Covid. Since people have shifted from the big metros and have started enjoying the benefits in smaller towns, these towns are now seeing a massive growth of new services. The old theatres are being renovated. Upper middle class restaurants where one spends upto Rs450 for a very decent dinner in a neat environment have opened up like never before. And for those who cannot afford the high cost, the low coat alternatives are simply multiplying day after day.
So, since global capital will be somewhat scarce, we need in-house resources to expand. Since the size of the economy is so huge in India, the rural sector will play a big role in keeping the economy moving. That is, while people will spend less, spending will not drastically stop. Prices of even branded FMCG items cannot be increased rapidly. This will lead to the 25 percent extra culture to push sales.
Let us wait and see when all these things happen.