Slowing down in the production of goods and services, measured by GDP growth, is typically not seen as desirable as it represents economic stagnation that can lead to various negative consequences. These include inflationary pressures due to increased cost of production inputs without a corresponding increase in output, higher unemployment rates, reduced government revenue due to decreased business activity, decreased investor confidence leading to market volatility and limited access to capital for businesses, increased debt burden on the government limiting social programs and infrastructure investment.
That doesn’t mean you can’t run an economy that’s not based on growth, but Europe operates under capitalism, and these are the problems capitalist economies tend to see when growth slows down.
Are these numbers referring to growth? So companies could still be having high profits, but they are the same as last year?
Slowing down in the production of goods and services, measured by GDP growth, is typically not seen as desirable as it represents economic stagnation that can lead to various negative consequences. These include inflationary pressures due to increased cost of production inputs without a corresponding increase in output, higher unemployment rates, reduced government revenue due to decreased business activity, decreased investor confidence leading to market volatility and limited access to capital for businesses, increased debt burden on the government limiting social programs and infrastructure investment.
That doesn’t mean you can’t run an economy that’s not based on growth, but Europe operates under capitalism, and these are the problems capitalist economies tend to see when growth slows down.