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News AMEGA

October 13, 2022 in 10:16

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Is the world headed for another recession?

In financial terms, a recession is a significant and prolonged period of downturned economic activity. This can be caused by many factors, such as inflation, structural shifts in industries, monetary and Fiscal policies, private sector decisions, oversupply, etc.

During a recession, consumer demand falls, and unemployment is on the rise. Since spending drops, depending on the severity of the recession, small businesses may start filing for bankruptcy while we also see a curb in credit access. Though most recessions don’t last more than a few months, a country’s economy could take years to recover.

Currently, all signs are pointing towards an impending recession coming in 2023, with the Geopolitical events affecting oil and natural gas prices, as well as the constantly rising Inflation.

The US dollar, which plays a huge part in global economy and international finance, is now stronger than it has been in the past 20 years, which in some ways is good news for Americans, but a huge problem for almost everyone else.

Since many global currencies such as the British pound, the Euro, and the Chinese Yuan are in decline, It is more expensive for those countries to import essential items like food and fuel.