Understanding Recession and Strategies to Deal With It
The Covid-19 pandemic has resulted in a decline in various economic sectors throughout the world, including Indonesia. Sri Mulyani Indrawati as the minister of finance said that our country could experience something called economic recession. He also said that in the third quarter it is possible that our economy will experience a minus 2.9 percent contraction.
The rupiah exchange rate itself which was transacted between banks also began to weaken. An economic recession occurs when the Gross Domestic Product (GDP) is negative, there is a decline in retail sales, reduced exports, income contraction, the number of unemployed increases, and manufacturing for a long period of time.
Definition of Recession
A recession is a condition when there is a significant decline in economic activity that lasts for months and even years.
By knowing this, of course, we all need to prepare a strategy to deal with an economic recession in the future. Don’t be late to minimize economic shocks, because if this happens, it will certainly cause a recession. One of them is rising prices and inflation resulting in a decrease in people’s purchasing power, so what do we need to prepare in the face of an economic recession?
Strategies for Coping with Recession
When a country experiences an economic shock, the government will immediately intervene. In this case, the government needs to make a creative and innovative breakthrough in the economic sector in order to avoid a recession.
But that’s not enough, the community also needs to support policies and be independent and not rely on the government. In the midst of a situation that allows an economic recession to occur, people must be able to manage their finances. In conditions that are completely limited due to the crisis, money really needs to be used wisely.
We quote from various sources the following are some positive strategies in preparing for a recession and while dealing with it.
Setting Up an Emergency Fund
Start setting aside your funds for savings in order to prepare for future emergency funds that are still a question mark. Prepare from now on, if you get help from the government in the form of money, don’t spend all the rest to increase savings.
Start Living Thrifty
Recession is a state of crisis, so start living frugally by cutting back on unnecessary spending. You need to train so that it doesn’t become a habit of extravagant life, hold on to secondary needs that are only for pleasure.
Pay off and Postpone Debt
Not the right choice if borrowing money or long-term rain during an economic recession. Even if you have debts or credit card bills, pay off immediately.
Open a New or Side Business
If you have a fixed income, try to increase it by looking for new business opportunities during the current recession. If you are still unemployed who are starting to adapt to opening a business, now there is a lot of help in the form of money from the central and regional governments, use it to start your business.
Thus, those of you who are already working will get additional income and those who are not working can have a new business. Starting small is okay by seeing business opportunities around you. Moreover, if you are one of the ones who passed the Pre-Employment Card program, you must have attended training and have new knowledge to put into practice immediately.
Also read: How to Buy Pre-Employment Training
Increase Work Capacity and Quality
A recession is also a reduction in employees, so you need to increase bargaining so that the company keeps you working there. Also for those of you who are independent entrepreneurs, you must increase your capacity and quality of work so you can get through the economic recession.
Always Think Positive and Willing to Innovate
Not everyone can face the economic recession well, not a few people will worry about their economic future. The way to deal with it is with don’t be panic! And practicing a positive mindset will relieve you of problems.
Don’t blame the circumstances.”open your mind“Start to innovate from now on, be able to adapt to the environment, and develop a better business.
Just do what can now be done, again don’t panic. A recession is bound to happen but this is arguably a temporary distraction. Start managing your own finances and we can definitely get through this recession together. Thank you