A Recession in 2023 Really? | Why Indian CEOs are talking about Recession | Recession and its Probable Impact on IT Industry

As the cost of necessities like food, heating, transportation, and housing rises, the average person is facing inflationary at levels that have not been seen in decades.Even while a peak may be in the offing, things could yet become worse.Wipro, Mahindra, and Infosys were recently in the news for withdrawing their appointment letters to several freshmen.This happened after a three- to six- month waiting period.The incident drew harsh criticism, and numerous authorities investigated the situation.Over 2500 newcomers suffered, despite the market leaders’ lack of a convincing defense.

Reason: War and Pandemic 

  • After COVID-19 hit, a protracted and peaceful period of low interest rates and little inflation quickly came to an end as central banks and governments provided trillions of dollars in assistance to keep locked-down firms and consumers afloat.
  • That lifeline prevented employees from joining the dole queue, businesses from going out of business, and home prices from plummeting.However, it also threw the relationship between supply and demand completely off balance.
  • All of that intervention money flooded the world’s trading by 2021, when lockdowns were lifted and the world economy expanded at its quickest rate following a Recession in eight years.


  • Double-digit inflation, known as a tax on the poor because it disproportionately affects those with modest incomes, has widened inequality around the globe.
  • Whereas more consumers today can rely on their savings from pandemic shutdowns, some find it difficult to survive and a rising number turn to food banks.As winter approaches in the Northern Hemisphere, the burden on living expenses will get much tighter as gasoline prices rise.
  • In order to demand that wages stay up with inflation, workers have gone on strike in industries ranging from healthcare to aviation.
  • They are frequently forced to make do with less.In certain circumstances, concerns about cost of living trump other objectives, such as addressing climate change, in the politics of wealthy nations.

Indian CEO about Recession

  • According to KPMG’s 2022 India CEO Outlook, Indian CEOs anticipate a downturn in the country’s and their companies’ growth prospects, but that things will soon improve. A Recession will have an up to 10% impact on firm earnings during the next 12 months, according to 86% of CEOs in India vs 71% elsewhere. 
  • Reduce profit margins and manage costs by 40%, increase productivity and diversify their supply chain by 34%, and adopt a hiring freeze by 34% are the top three strategies for navigating such issues. In order to get ready for an expected Recession, half of Indian CEOs intend to postpone or scale down their digital strategy during the next six months.

India and Recession Impact in 2023

  • The Indian economy expanded by 8.7% in 2021, according to the World Bank’s most recent report, published in October 2022. It is projected to expand by 6.5% in the upcoming fiscal year 2022–2023. According to the international financial institution, the Indian economy has recovered remarkably well from the severe contraction seen during the pandemic, especially when compared to other South Asian nations. 
  • The forecast is still very positive even though it is 1% less than the International Bank’s estimate from June 2022. India is better able to deal with the difficulties in the event of a downturn in 2023 since it has less borrowings and the Reserve Bank of India has sensibly modified monetary policy in recent quarters.

What actions should investors take if there is a Recession in 2023?

  • Since it is difficult to predict how a Recession would affect business and the economy, the best we can hope for is to be prepared for the worst without going into complete denial. If you’re an investor, there are several steps you may take to safeguard your savings and produce investment returns. Before making an investment during a Recession, consider the following:
  • If you know where to look, the Recession, like earlier economic cycles, presents a variety of investment opportunities. Because they often have broad income streams, efficient supply networks, and a consistent client base, larger organizations typically perform better than small and mid-cap enterprises in times of no or poor economic growth.
  • Whenever economic growth is weak and there are fewer sources of income, smaller businesses could have difficulties with their growth plans, supplier networks, and client bases.Consequently, equity investors may adopt a diversified investment approach that places a greater emphasis on larger-cap companies.
  • If you’d rather use mutual funds, you can invest to earn returns in the best-performing large-cap mutual funds.Investors are urged to invest according to their risk tolerance, while it can be impossible to foresee how inflation will affect a given market.

Recession and its Probable Impact on IT Industry

The previous year has been extremely unpredictable for the IT sector, with stock values falling as a result of the Recession’s effects in the US and subsequently around the world.American and other foreign businesses have dominated the Indian IT industry.These businesses have begun to lay off employees due to the severe Recession that is sweeping the globe.Numerous thousands of workers have been let go by well-known companies including Amazon, Apple, and Microsoft.Even while the numbers are still increasing, many Indian corporations, such Tata and HCL, have maintained a consistent rate of economic expansion.Although comparing a company’s ups and downs to a sovereign state would not be the sole determinant, different companies experience ups and downs for various causes.


Investors would be advised to keep oneself prepared for the event given the diverse opinions of academics and international organizations regarding whether a Recession will occur in 2023 and the impact of downturn on the economy.Instead of reacting to it once it has started, a proactive investing approach could assist investors in maximizing the possible prospects.

(Note: We thank all the mentioned sources for valuable research materials. It is our sincere wish that you find value in this article. These articles are intended solely for informational purposes; if further clarification is required, please consult appropriate professionals. Nothing on this site is for sale or promotion.)

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