Recession - what is it?

Today in many media there is the word "recession". What it is? Experts characterize this state of the economy as one of the phases of the business cycle (the period of recession, followed by a period of growth). For the first time such a state of things manifested itself in the United States, during the Great Depression (early 30s of the last century). It provoked panic on stock exchanges, the collapse of quotations, the closure of enterprises, the migration of population from one state to another, etc. Since then, economic recessions have been repeated, both in different countries and in the global economy as a whole.

Definition

Recession. What does that mean today? The classical definition indicates that recessive factors, in general, are expressed in a fall in gross domestic product volumes. It, in turn, is defined as the value of goods and services that the resident enterprises of the given country have produced for end use. At more detailed consideration such factors as: a condition and dynamics of development of the basic branches, level of export of production, volume of release of securities by various emitters, an employment level, etc. are determined.

Recession. What is this in terms of historical and prospective processes? It is assumed that such a state can arise when standards of personal consumption are growing extremely. Industry, in turn, focusing on them, lays in their projects increased demand, and banks under them give loans. At the same time there is a tendency to reduce the real efficiency of companies. The mass of the population has a well-being, which they did not earn, but, as it were, they received a loan at the expense of the future. Sooner or later this "pyramid of expectations" begins to fall apart.

Is there a recession or not?

The recession in Russia (2013) did not occur due to formal signs, since the first GDP calculation for the above-mentioned year revealed a growth rate of 1.3%. However, during this period, a decline in productivity was observed in the main economic directions (trade in wholesale and retail, construction, freight, processing and mining, mining and agriculture) (taking into account the seasonality, as well as the unfavorable conditions for agriculture).

Recession. What does this mean for an ordinary citizen or an entrepreneur? Such economic conditions almost always reduce consumer demand, the number of jobs decreases, and inflation indicators increase. It becomes more difficult to take a loan or organize your own business. Part of the general state of affairs in our country is due to the global crisis, since Russia is part of the system, therefore, it is affected by the shrinking demand from foreign consumers of products.

It will take time and new solutions

The growth of unemployment in Russia (up to one million officially registered people), the reduction in the rate of personal income growth (from 8.4% per year to 4.8%) - this is what the recession in the Russian economy in 2013 is. Experts believe that this state is not acute, and crisis times for Russians will not come. However, getting out of the sluggish decline in economic indicators will be problematic, and this process will take a sufficient amount of time.