Recession is an economic term that refers to a significant decline in economic activity within a country, typically characterized by a decrease in Gross Domestic Product (GDP), income, employment, industrial production, and trade. It is considered a negative phase of the business cycle, often accompanied by reduced consumer spending, investment, and corporate profits. Recession generally lasts for a prolonged period, typically more than six months, and is marked by a widespread decline in economic indicators.
During a recession, businesses may experience financial difficulties, leading to layoffs, reduced working hours, and the closure of some companies. This results in higher unemployment rates and a decline in consumer confidence, leading to a further decrease in spending and a slowdown in economic growth. The government and central banks often implement various measures, such as monetary and fiscal policies, in an attempt to stimulate economic recovery and minimize the negative impact on the population.
Recessions can have profound social and economic consequences, including increased poverty, inequality, and financial instability. However, they can also lead to structural changes, such as the reallocation of resources and the emergence of new industries and technologies. The severity and duration of a recession can vary, with some being relatively mild and short-lived, while others can be deep and prolonged, often referred to as a depression.
In summary, a recession refers to a significant decline in economic activity, leading to reduced GDP, income, employment, and trade, typically lasting for a prolonged period.
