An economic recession, in technical terms, is defined as a situation in which the gross domestic product (GDP) of an economy experiences a contraction for two quarters consecutively. The GDP is one of the primary indicators that is used to gauge the health of a country’s economy. It represents the total dollar value of all goods and services produced over a specific time period.
As per the data released by the UK Central Office for Statistics, the economy of the United Kingdom has entered into a recession. This was indicated by the contraction of the UK’s GDP by 0.3% in the last quarter of 2023, which followed a contraction of 0.1% in the third quarter of the same year. This means that the economy shrank for two consecutive quarters, meeting the technical definition of a recession.
Analysts and economists had been expecting the onset of a recession, given the negative economic indicators. However, they were taken by surprise by the extent of the contraction. While they had predicted a contraction of 0.1% for the fourth quarter, the actual contraction was more severe at 0.3%, indicating a deeper than expected slump in the economy.
Despite the recession, it is worth noting that the UK economy did manage to achieve a slight growth over the entire year. In 2023, despite the contractions in the last two quarters, the GDP of the UK still saw an overall growth of 0.1%.
Meanwhile, Japan, another major global economy, also found itself in the grip of a recession. The Japanese government announced that the country’s economy had also contracted, entering into a period of recession. The GDP of Japan contracted by 0.4% in the fourth quarter of 2023, following a substantial contraction of 3.3% in the third quarter. This double contraction signaled the onset of a recession in Japan’s economy.
