A global recession is a decline in a country’s real gross domestic product (GDP). The scale and impact of a global recession varies depending on the nature of a country’s trading relationships, the sophistication of its financial markets and investment efficiency, as well as a host of other factors.
In general, a global recession results in a fall in economic activity and a corresponding drop in output and consumption. It also leads to a rise in unemployment rates and a decrease in investment, and it can cause house and stock prices to plummet. A global recession can also increase inflation.
Although US recessions had become milder over time, the recent global crisis reversed that trend and triggered one of the longest and deepest recessions since the Great Depression of the 1930s. This global downturn caused a sharp rise in unemployment along with substantial declines in output, consumption, and investment.
Several economists believe that a global recession is possible in the near future. The chance that the United States will enter a recession has risen to 40 percent according to J.P. Morgan’s chief global economist, while the head of Moody’s Analytics said in March 2025 that recession risks have increased across all major economies. A global recession would have a significant effect on people’s spending, leading to a reduction in demand for goods and services, which in turn would lead to fewer jobs, lower wages, and lower tax revenues.
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