It has been almost a year since the Lehman collapsed and the world economy is still in its path to recovery. Speculations have been there about the path the recovery is going to take which is giving bulls the sleepless nights and economists are wary of predicting the new path the recovery is going to take. The recovery path charted out seems to be a square root shaped curve with every measure and indicator being back somewhat halfway of the normal level and then what seems to stay at a constant level for sometime. The global market capitalization fell from $75 trillion to $35 trillion post Lehman and market has now recovered $20 trillion of its value. In India sensex closed to 16454.45 after a fall from 21000, an increase in the excise collection over 22% for this month over the previous month and recovery of about $11 billion from the $12 billion capital outflows are a strong indicator that the economy is on its way back despite some hiccups but it is still a long way to say that it will bounce back to the previous levels. Emerging markets particularly the BRICs have returned to their pre Lehman levels but developed ones are still far below. These indicators support the fact about a slow recovery which still does not have the substance and the strength to take it upwards and to bring it back to the same level. For now the best way could be a pervasive action instead of waiting and watching economy bounce back and forth.
Contributed by:-
Divyank Gupta
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