Preparing for the inevitable

Global slowdown: Women on shopping spree in Kuala Lumpur. Malaysia is likely to feel the pinch of global recession with most of the sectors expected to slow down.

IT may seem that we are overdue for a recession, given the historical trend showing a recession for the past two decades. As the phrase goes, “All good things must come to an end”. But are we heading for a recession in the near term?

Recession refers to a business cycle contraction which results in a general slowdown of a nation’s economic activity, measured by the Gross Domestic Product (GDP). It occurs when there is a prevalent fall in spending – an adverse demand shock – more likely triggered by several events such as a financial crisis, bursting of the economic bubble, or an external trade shock.