The situation in the US is not very rosy where the unemployment figure is at 9.7% as per the Bureau of Labor Statistics. Added to that is the fact that GDP growth has been lower than expected for the 1st Quarter of 2010, while the fiscal deficient is in excess of 10% and US national debt is reaching 75%. The EU is also facing similar pressures and as per the European Economic Forecast – Spring 2010, the EU GDP growth will be depressed for the 1st three quarters of 2010. The employment rate is expected to fall by 1% this year, putting greater pressure in the unemployment rate. The fiscal deficient would be as high as 6.8% throughout the EU, and a debt to GDP ratio of 78.7%.

Further hampering a climb out from the recession with deficit’s and debts reaching record levels; Governments do not have the stomach for more stimulus packages. Another factor likely to affect the world economy in 2010-2011 is a potential crash in World Agricultural prices.  As per the FAO the Food Price Index has consistently been falling from 174 in Jan 2010 to around 164 in May 2010. Although highly tentative the forecast of rice production alone is estimated to see an increase of more than 4% in 2010-2011. This may greatly impact the BRIC economies where close to 39% of the labor force and 10% of GDP is based on agriculture, unlike the developed economies where only about 2%(US), 4% (EU) labor force is agriculture dependent. All this would further put pressure on the global economy as strong markets like China and India may also be affected adversely.

So what is the way out? Outsourcing is actually a great way forward to target organizations under price and cost pressures; however the tag of offshoring which has been appended to it is a political hot potato.

FOR MORE READING : http://blog.nasscom.in/emerge/2010/07/opportunities-for-the-it-industry-in-a-continued-recessionary-economy/