How Deep Is The Recession? Here's The Illustration If It HAPPENs Next Year

Illustration of economic recession (Unsplash)

YOGYAKARTA The government continues to strive to overcome the economic recession that is predicted to occur next year. This condition will have an impact on various sectors, from the business sector to household. Then, how scary is the recession?

In general, the definition of a recession is a term used in circumstances when a country's economy worsens or the wheels of the economy slows down. When a country experiences an economic slowdown, the country can be said to be experiencing a recession.

The recession was marked by a decrease in gross domestic product (GDP) within a certain period of time and occurred for a row. GDP itself is the number of goods and services produced by a country within one year.

The recession is a frightening scourge because it affects all levels of society drastically.

Actually, there are many triggers for recession in a country, including the COVID-19 pandemic that has occurred for several consecutive years, even now. At that time, the wheels of the economy actually fell. People's purchasing power has also even plummeted. Apart from the pandemic, the cause of the economic recession is as follows.

This condition is one of the biggest causes of the economic recession. Economic shocks will have an impact on many sectors ranging from business to household which then have an impact on the recession.

Economic shocks themselves can be caused by many things such as war involving two countries to more, or disease pandemics.

Inflation causes production prices to increase which has an impact on the price of goods or services. This increase can have an impact on reducing people's purchasing power. Inflation can actually be overcome by maintaining people's purchasing power.

Deflation is a condition when the price of goods or services has decreased within a certain period of time. This condition will be felt especially by entrepreneurs to the state.

Technology can replace human work. When that happens, the company will cut workers and select robots as their successors. If worker cuts occur in large numbers and simultaneously, the wheels of the economy will slow down.

This condition occurs when the price of an item or asset rises extremely and makes the owners immediately sell the asset to make the availability of assets in the market abundant. And when that happens, prices will immediately drop drastically.

The impact of an economous recession such as a domino arrangement, if one collapses it will have an impact on the other arrangement. When a recession occurs, it will broadly impact economic activity in a country.

The first thing that may be felt is the increase in the price of basic necessities and production. The high cost will result in cutting production and operational costs including reducing workers. When worker reduction increases, unemployment also increases. On the other hand, the price of basic necessities is high.

If the causes and impacts of the recession are not anticipated and not overcome, it will have an impact on countries that have lost their income.

That's how scary the recession is. To get other interesting information, visit VOI.ID.