GDP contraction

GDP contraction occurs when a country's total economic output decreases over a period of time, typically measured quarterly or annually. It means that the production of goods and services has shrunk, signaling a slowdown in economic activity. This can happen due to reduced consumer spending, business investment, or exports, often influenced by factors like financial crises, high unemployment, or declining demand. A shrinking GDP suggests the economy is weakening and may lead to higher unemployment and lower income levels, but it's also a normal part of economic cycles.