The impact of Global Recession

The impact of Global Recession

Is recession inevitable??

Recession is no longer if but when, but what are the signs that the economy is teetering on the cliff's edge?

The potential recession in 2023 looks like the unique one we've ever seen. But what are the reasons behind the upcoming recessions? Let's find out.

Robust Labour Market: Lower revenue compels businesses and companies to cut back on staff, leading to high unemployment. The official unemployment rate in July was 3.5%. This unusual job marketing would derive strength against the other factors during the recession.

Cash-rich Companies: Companies see a decline in sales during recessions. They might have raised funds during the era of Money and low-interest rates, but now this cash is acting as a buffer, allowing them to rest staff despite the economic slowdown.?

Rising rates: During most recessions, the central bank cuts interest rates and adds more money to the economy to stabilize it. However, the Fed has aggressively increased rates to curb inflation and keeps raising rates considering the job market and balance strength.

Job Loss: A global recession can lead to widespread job loss as companies struggle to stay afloat. This can lead to higher unemployment rates and increased financial insecurity for individuals.

Business closures: Many small and medium-sized businesses may not have enough cash reserve to survive the economic downturn and may have to close their doors.

Reduced consumer spending: As individuals lose jobs or face financial uncertainty, they may cut back on spending, which can lead to further economic struggles for businesses.

Reduced economic growth: A global recession can lead to a decrease in economic activity and growth, which can have long-term effects on the economy.

Increased poverty: The recession can lead to increased poverty rates, especially for the most vulnerable segments of society.

So can a recession hurt big?

Yes, a recession can hurt large and small companies, though larger ones have a financial cushion and more cost-cutting options that can help them weather the downturn; however, smaller businesses have a smaller margin of error than larger ones when a recession strikes.?

So, are we in a recession yet?

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