RECESSION

Subject : Economics

Context : July-Sept GDP to contract 8.6%, estimates RBI. However, RBI said the economy will break out of contraction of the six months gone by and return to positive growth in the October-December quarter of 2020-21.

Concept :

• Recession refers to a phase of the downturn in the economic cycle when there is a fall in the country’s GDP for some quarters.
• It begins after the economy reaches a peak of activity and ends as the economy reaches its trough.
• A common rule of thumb for recessions is two quarters of negative GDP growth.
• A recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year.’