Recession is a term that makes people anxious to welcome the arrival of 2023. People are suddenly curious about the term that suddenly went viral at the end of the year, recession is the term that is the cause.
Definition of Recession
Recession is an economic term that describes the state of a country’s economy that is slowing or deteriorating.
This long economic turnover is the result of a country’s gross domestic product (GDP) growth declining. Where it lasts for two kartals and continuously.
Factors That Cause Recession Are
There are various factors that trigger a recession in a country. The factors causing the recession are as follows.
Inflation
The first factor is inflation, which is the condition of rising prices continuously, both the price of goods and services.
The increase in prices certainly has an impact on the weakening of people’s purchasing power which will eventually be accompanied by a decrease in the production of goods and services.
When this situation continues continuously, it will lead to recession as a result of high unemployment due to mass layoffs and poverty.
Excessive Deflation
Deflation also has a bad effect and can trigger a recession just like inflation.
Deflation is a condition when the price of goods and services falls over time resulting in a decrease in wages paid.
Sudden Economic Shocks
The trigger for recessions that also often occur is economic shocks that occur suddenly.
This is characterized by declining purchasing power due to financial difficulties and other serious problems such as accumulated debt.
Because debt results in bloated interest and must be paid with money
Accumulated debt will affect the swelling of interest that needs to be paid and result in default.
Technology Development
The development of technology that facilitates human work can be a factor causing a recession.
With the rapid development of technology with the existence of AI and robots, the decline in employment is even greater.
As a result, employment will decrease and unemployment will increase dramatically.
Recession is a scourge for all countries and societies, because life can be more difficult than ever.
