Understanding, Causes And Impact Of Economic Recession Accompanied By How To Face Resesion

Illustration of the economic recession (Unsplash)

YOGYAKARTA Recession is a frightening scourge for all countries, including Indonesia.

The world economy that is not doing well makes the government continue to work hard to minimize the risk of a recession. As a people, identify the understanding, causes and impact of the economic recession to what steps you can take at this time.

In the Big Indonesian Dictionary (KBB) the recession is the flexibility in trading, industrial, and so on. In addition, it can also be interpreted as a decrease in trading activities.

The Economic Times explains that recession is a massive slowdown or contraction in economic activity. High spending reductions generally lead to a recession.

Quoted from Gramedia, the decline in economic activity that triggers a recession starts from months to years. This means that there is a massive contraction in economic activity.

On the attitudeoangmu.ojk.go.id page, the economic recession is interpreted as a condition where the economy of a country is deteriorating, which is marked by a decrease in gross domestic product (GDP), increasing unemployment, and negative real economic growth over the second quarter in a row.

The economic recession was triggered by various matters related to the economy. In general, the cause is as follows.

Inflation is a condition in which the price of an item increases continuously during a certain period. Inflation will make people's purchasing power weaken, then have an impact on economic activities that do not work. Excessive inflation in a country will be very dangerous because it has the potential to cause a recession.

Economy activities that stop in extremes are very dangerous for a country. This incident occurred during the COVID-19 pandemic. Many countries have economic paralysis that has the potential to invite recession.

Deflation is a condition in which the price of goods or services has decreased extremely. This condition is an opponent of inflation. However, this condition is no less dangerous because it is able to harm the provider of goods and services. When experiencing losses, production activities will decrease and people's purchasing power will also weaken.

The cause of inflation can be triggered by the application of new technologies. This happens in technology that can replace labor and massive unemployment arise. When many people lose their purchasing power eye, they will be weak and the economy will stop.

The asset bubble is a condition in which asset prices rise extremely and makes many asset owners without thinking immediately make sales. This triggers a recession because it directly destroys the market. Therefore, asset owners are not recommended to be provoked by such conditions.

Resession is a condition that needs to be avoided and even anticipated. The impact of a recession can be experienced by the whole community. The impact is as follows.

Most countries are currently in danger of experiencing a recession, including Indonesia. To prepare for this condition, there are several ways that the community can do, namely as follows.

That's information related to the causes and impact of the economic recession. To get other interesting information, visit VOI.ID.