Kathmandu. Germany is the largest economy in Europe. Now there are news that the economy has been pushed into economic recession. According to the recently released data by the German Statistics Office, the economy shrank by 0.3 percent in the first quarter of 2023. Germany is the fourth largest economy in the world. So far, Germany is the largest economy after America, China and Japan.

The German economy was seen in contraction in the previous quarter as well. The fuel crisis caused by the Ukraine war has pushed the German economy, which still has great potential and stands on a strong foundation, into recession. Even in the last quarter of 2022, the economy here had decreased by 0.5 percent. Economic activity is defined as economic recession if it remains negative for 6 consecutive months. It is mentioned in the news that Germany is currently dealing with an extreme energy crisis. Currently, the size of Germany's economy is equal to 45 billion euros.

On the other hand, the crisis seen in the parliamentary politics in America, the world's largest economy, has increased the risk of creating a new situation within a week. If the American Parliament does not decide to increase the credit limit by June 1, it is seen that the world's No. 1 economy will soon be declared a 'defaulter'. When the economy collapses due to the inability to pay the public debt, it is called 'defaulter', some time ago Sri Lanka faced this situation due to lack of foreign exchange.

If America becomes a defaulter, it will push not only America, but many economies of the world into recession. This has proven to be a danger to the world economy. America has already gone through the bad experience of sinking big 3 banks this year. The risk level of the US financial system has not yet come down from its high point.

Last week, there were news that many companies from Bath and Beyond to Vice Media have collapsed in America. Last week, the American corporate world suffered the worst results since the financial crisis of 2008. In the 5 months of 2023 alone, 230 companies in America have come to knock on the door of the court for judicial protection. Many companies that are burdened with unsustainable debt have now reached a condition where they cannot run.

In Nepal, starting from New Road in Kathmandu, even in the small city-facing areas, shutters are starting to be empty. The situation has been seen in America, Germany and many countries of the world. Due to the reduction in consumer spending and changes in shopping behavior, the retail industry has become one of the most ailing across the world. The process of companies going bankrupt has not stopped, rather it seems that its intensity is gradually increasing and spreading all over the world.

Big economies like China and India are still in strong condition. But there are predictions that the world's largest economy, including America, will enter recession within a few weeks. If we look at South Asia, the condition of countries other than India is bad. Bangladesh's local currency has recently depreciated to record levels.