Impact of Recession on Indian Pharma Sector

Abstract

Every economy faces many economical downfalls and crisis in an era which affects the entire world and shakes its stability disastrously. Recession being the one, is a decline in the Gross Domestic Product of a nation for two or more consecutive quarters. The Great Recession was a global economic decline from 2008-2009. It initially began with financial liquidity crisis from 9th August 2007. It merely began as a national recession in United States from December 2007, but IMF’s criteria for global recession met when there was a decline in annual per capita real World GDP in the single calendar year of 2009. The major cause of crisis of 2008 was the failure of the leading financial institutions globally, starting with the fall of investment bank Bear Stearns in March 2008, and failure of Lehman Bros. in 2008. The bursting of housing bubble in US was one of the primary causes. Decrease in consumer demand and consumption led to decline in production and raised unemployment. Soon it affected many other countries in Europe and Asia including India. But the matter of study is whether the Indian Pharmaceutical Sector which has always shown an accelerated trend in growth since the last few years is affected by recession or not. This study is designed to find out the impact of recession on Indian Pharmaceutical Sector. Looking into the growth trend of Indian Pharmaceutical Sector, we feel that, though recession affected all the sectors, Indian Pharmaceutical Sector is not affected to that extent.

Keywords: Economic Downfall, Gross Domestic Product, Indian Pharmaceutical Sector, Recession

JEL Classification: E02, E03, E44, F04