Recession – Its Effects

These days we hear a lot about global recession, every media is talking about it. GDP is affected with this and expected to decrease. Many factors are responsible for the recession like credit crunch, falling house prices, collapse of confidence of financial sector and many more.

Major consequences are experienced by many economies due to recession and major effect of it is inflation. Commodities reached to highest rates and purchasing power of the consumer is reduced. Wantedly people are cutting their cost and plan to save more money for their security. The businesses are affected badly. People are not interested in purchasing the products. Many people have a fear of losing their job due to this.

Companies are planning for cost reduction by cutting down the employment opportunities. Companies are also experiencing decrease in profitability because of low sales, increase in prices of material, increase in cost of production etc.