The causes of economic recession are:

• Big companies or investors facing heavy loses and showing low profit.
• Unemployment rate steadily increasing
• Loan borrowers unable to pay back and end up defaulting
• General goods prices increase
• Purchases by credit card increase
• Prices of stock and property falls and still nobody buys them
• Vacancies in companies become rare
• GDP of the country decreases

If these signs begin to be evident in any country, it means recession and economic crisis is not far away. Economic recession is caused by wide based increase in interest rates or a loss of consumer trust. Economists believe that recession is also caused by specific events that affect certain industries. A severe economic recession can have drastic effects on a country’s well being in the long run. Economists say that recession, in some degree, is totally unavoidable and its causes are not always clear or evident. It takes time for such economies to emerge from the losses and get back on track financially.

Regardless of which causes or theories you believe in, there is no specific cause for recession. It happens due to a series of events, which make it hard for us to avoid recession.

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