Definition, Meaning & Synonyms

economic-contraction

noun

/ˌiː.kəˈnɒm.ɪk kənˈtræk.ʃən/

Definition

A decline in national output or economic activity, usually measured by a decrease in the gross domestic product (GDP).

Examples

The recent economic contraction has led to higher unemployment rates.
During the pandemic, many countries experienced severe economic contraction.
The government is implementing policies to combat the effects of economic contraction.

Meaning

Economic contraction refers to a period when the economy shrinks, resulting in reduced consumer spending, business investment, and overall economic performance. This phenomenon can lead to a recession if it persists over time.