the winds of a global economic recession they are getting stronger. As well as the concerns of the countries about its possible effects on local economies. Experts agree that the impact would also be for ordinary citizens.
(Read: ‘The worst is yet to come’: the IMF’s harsh economic warning).
What is an economic recession?
It’s about a period of economic slowdown. According to the National Bureau of Economic Research, in the United States, a recession implies a decrease in economic activity at a general level. “It lasts more than a few months, usually visible in production, employment, real income and other indicators,” they explain.
Now, the closest picture, at least in the United States, is what economists have called a ‘technical recession’. That is, when the growth of the Gross Domestic Product (GDP) of a country contracts for two consecutive quarters or a semester.
What effects does a recession have on the economy?
Although the impacts are not uniform and depend on each society. The recession implies a increase in unemployment due to the lack of growth in the economy. Likewise, consumption decreases due to the increase in inflation figures and, with it, the price of certain products and services.
(Also: Could Colombia enter a recession? These are the possible scenarios).
Along with this, GDP has one of the most direct impacts.
How would it affect Colombia?
Economic recession
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According to the World Bank, the current crisis would have an effect on several world economies and, above all, on the developing markets. For example, in the United States.
That is why Colombia could not be immune to this global crisis. It should be remembered that in July of this year the United States was the the country’s main partner in terms of exports with a 26% share.
The Minister of Finance, José Antonio Ocampo, has recognized this after explaining that the economic crisis that is being experienced has a global impact. Another effect comes from the tendency of the monetary policy of the main banks in the world. In recent months there have been significant increases in interest rates and this leads to external financing with high costs.
(See: In Latin America prices will rise and its economy will suffer in 2023).
The effects on the ordinary citizen
Regarding the effects on citizens, Gloria Nancy Ríos, an economist and specialist in management and a master’s degree in social psychology, assures that it is need to talk about nutrition. “We Colombians are not nourishing ourselves because we do not have enough to buy vegetables, proteins and others. Then we buy the cheapest“, he assures.
Inflation hits consumer confidence and has repercussions on producers, supply contracts and this, in turn, implies lower income, lower quality of lifemore unemployment and economic instability.
It recognizes that the impact of a recession is great in terms of access to certain goods and services on a day-to-day basis.
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