The economic cycle refers to the succession of periods of expansion and contraction in the economic activity of a country or the global economy.
According to the financial portal Mais Retorno, each phase is characterised by different levels of growth in output, consumption, investment, employment, and credit provision.
To understand the concept, consider the seasons of the year. Summer is defined by high temperatures, while Winter brings lower ones. Between the two, Spring and Autumn represent transitional periods. In a similar way, the economy moves through phases of growth, slowdown, contraction, and recovery.
A phase of economic expansion can manifest, for example, in an increase in business investment, the opening of new enterprises, job creation, and rising household consumption. Conversely, a slowdown may prompt companies to defer investment, scale back hiring, and curb production.
It is important to note, however, that the economic cycle does not follow a fixed calendar. There is no precise date marking the beginning or end of any given phase, as its duration depends on a range of factors — including economic policy, international market conditions, investment levels, consumer behaviour, and the occurrence of internal or external shocks.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=555445
