About the Economic Recession and Must Be Prepared Page all

KOMPAS.com – Pandemic corona virus what happens all over the world has an impact on the economy, not just on health.

A number of countries reported an economic downturn, some even experienced it recession.

Reported Forbes, July 15, 2020, recession occurs when economic activity falls significantly for months or even years.

Recession considered as an inevitable part of a country’s economic cycle.

Some experts say there are a number of indicators of a country experiencing a recession.

Among them are negative gross domestic product (GDP), unemployment increased, retail sales declined, and manufacturing contracted for a long period of time.

Also read: Observer: Handling Covid-19 is the Key to Avoiding Economic Recession

7 natural countries recession

At least, it was reported Kompas.com, Sunday (2/8/2020), there were seven countries that experienced a recession due to the Covid-19 pandemic.

First, South Korea. In the second quarter of 2020, South Korea experiencing economic depreciation of 3.3 percent.

Second, Singapore. Singapore’s economy fell into a severe recession in the second quarter of 2020. Singapore’s economy is minus up to 41.2 percent.

Third, Germany. In the first quarter of 2020, German economic growth was reported to be minus 2.2 percent.

Fourth, the United States. The economy in the United States’ superpower has been hit by a storm of recession. US economic growth minus 5 percent in the first quarter of 2020.

Fifth, Japan. Japan’s economic growth is reported to be minus 3.4 percent in the January-March 2020 period, compared to the same period in 2019.

Sixth, France. In March 2020 yesterday, France experienced economic growth of minus 5.8 percent.

Seventh, Italy. Growth the economy Italy is also reported to be minus 4.7 percent in March 2020.

Impact of recession

A country that is experiencing a recession will be shaken by its economy, because there will be a domino impact.

For example, investments that plummet during a recession will automatically cause employment terminations to rise significantly and eliminate a number of jobs.

The production of goods and services has fallen, thereby reducing national GDP. If not resolved immediately, the recession domino effect will spread to various sectors.

The next effect that can occur is bank credit defaults that make inflation difficult to control or otherwise deflation occurs.

In addition, it will also have a negative impact on the trade balance and directly impact foreign exchange reserves.

Examples of real conditions are many people lose their homes because they are unable to pay installments, weak purchasing power, so many businesses out of business.

Also read: 6 Natural Signs of the Economic Recession, What about Indonesia?

That must be prepared

People in Indonesia must also be prepared if a recession hits the country. Moreover, quoted from Kompas.com on July 24, 2020, Indonesia was also threatened with a recession because its economic growth was predicted to be negative in the second quarter of 2020.

If this negative economic growth condition goes into the third quarter of 2020, then it is certain that Indonesia is entering a recession.

Financial expert Ahmad Gozali said the impact of the economic recession, especially what the lower class society feels, is the rising unemployment rate.

“Domestic production decreases automatically, employment also decreases. This causes an increase in poverty,” Gozali said when contacted Kompas.com, Tuesday (4/8/2020).

Gozali said that there were some things that in general could be prepared to survive during a recession.

First, protect sources of income. If an employee is advised not to aggressively move jobs before there is certainty that the new job is more stable.

Also read: The Dark History of the Indonesian Economic Recession in 1998

As for business people, Gozali said, it should be reconsidered expansion plans.

Second, have a reserve fund. He said the reserve fund that must be prepared should be three to 12 times the monthly expenditure.

Third, hold back big spending, especially credit. According to him, plans for vehicle loans to homes need to be reconsidered, especially if they have to disturb reserve funds.

Fourth, routine shopping is still being done. Gozali explained, the expenditure of household consumption must continue to be done because it is a dominant factor to drive the domestic economy.

Also read: If an Economic Recession Happens, Here Is What The Community Can Do

Sources: Kompas.com (Jawahir Gustav Rizal, Nur Fitriatus Shalihah, Ahmad Naufal Dzulfaroh, Yohana Artha Uly / Editor: Rizal Setyo Nugroho, Sari Hardiyanto, Bambang P. Jatmiko)

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