Business cycle and recession info box
Economy
The economy describes the overall state of the economy of a country and reflects its development.
In general usage, the term economy is often used somewhat imprecisely as an upswing or upswing phase.
Basically, one can distinguish between four economic phases: Boom (boom, unlimited demand), recession (downturn phase, falling demand), Depression (low phase without demand), Expansion (Upswing phase with increasing demand once more).
Together, the four phases result in the so-called business cycle.
Factors that influence the economic trend include the Consumption private households, investments from companies or even the earnings and expenses of the state. In principle, the following applies: Rising expenditures and rising consumption promote the economic upswing.
recession and gross domestic product
A recession is a phase in the economic cycle when the economy is shrinking.
Characteristics of a recession include a decline in demand and production, increased layoffs and bankruptcies such as decreasing investments.
The treacherous thing regarding a recession is that the Downward process amplified in a way by itself. Falling consumption leads to falling sales and subsequently to layoffs. This leads to falling incomes, which in turn has a negative impact on consumption, etc.
Generally speaking, a country is in recession when the economy shrinks for two consecutive quarters, i.e. over a period of six months. The primary indicator used is gross domestic product (GDP).
GDP is the value of all goods and services produced nationally in a year – it is a measure of the economic performance of a country.
During the course of the pandemic, many economies plunged into recession – in Austria, for example, GDP fell by 6.5 percent in 2020.
The economy then recovered once more in 2021 – in Austria growth was 4.6 percent. According to the current economic forecast by WIFO, Austrian GDP is expected to grow once more by 4.8 percent in 2022 – for 2023, however, an approximate stagnation is then forecast (0.2 percent).
As a result, the recession – at least in 2023 – is not yet imminent.
