What causes it?

An economy which grows over a period of time tends to slow down the growth as a part of the normal economic cycle. An economy typically expands for 6-10 years and tends to go into a recession for about six months to 2 years.


A recession normally takes place when consumers lose confidence in the growth of the economy and spend less.


This leads to a decreased demand for goods and services, which in turn leads to a decrease in production, lay-offs and a sharp rise in unemployment.


Investors spend less as they fear stocks values will fall and thus stock markets fall on negative sentiment.