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What is Recession Risk?

 , updated on July 13, 2023
Recession risk is the potential for an economic contraction to result in negative outcomes. A recession is an economic contraction that lasts two financial quarters or more. These can occur at the global, national or regional level. A recession typically causes economic disruption that impacts all businesses to one degree or another. In some cases, businesses selling inferior goods benefit from a recession.
Overview: Recession Risk
Type
Definition
The potential for a recession to impact your ability to meet business or financial goals.
Examples
Credit contractions in a recession may make refinancing difficult.
Demand for products and services typically declines during a recession.
A recession can result in excess capacity at factories or overstocked warehouses leading to discounting and price declines across an industry.
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