A recession is a period of temporary economic decline, typically involving reduced GDP, industrial output, employment, and income.
- High inflation, rising interest rates, supply-and-demand imbalances, or external shocks such as pandemics or conflicts.
Types
- Technical Recession: Two quarters of GDP contraction.
- Balance Sheet Recession: Firms focus on debt repayment over investment.
- Double-Dip Recession: A relapse after partial recovery.
Impacts
- Unemployment reduces consumer spending and strains government revenues, often hitting low-skilled workers hardest. Businesses may close, amplifying fiscal deficits.
Source: The Hindu