A recession refers to a significant decline in economic activity within a country or across the global economy. It's characterized by a widespread decrease in economic indicators such as gross domestic product (GDP), employment, industrial production, consumer spending, and business profits.
Key features of a recession include:
1. **Decline in GDP:** A sustained period of negative economic growth, typically measured over two consecutive quarters or more.
2. **Rising Unemployment:** Job losses and increased unemployment rates as businesses reduce production and cut jobs to cope with reduced demand.
3. **Reduced Consumer Spending:** People tend to spend less due to economic uncertainty, leading to decreased demand for goods and services.
4. **Business Contraction:** Companies may scale back operations, reduce investments, or face financial difficulties, which can lead to closures or bankruptcies.
Recessions can be caused by various factors such as a decline in consumer confidence, financial crises, inflation, high-interest rates, geopolitical events, or disruptions in global trade.
Governments and central banks often implement measures like fiscal stimulus packages, monetary policy adjustments, and other interventions to mitigate the impacts of a recession, stabilize the economy, and stimulate growth.
