UAE, Gulf economies will be relatively insulated from any global recession

A recession can be triggered by a country’s decision to reduce inflation by employing contractionary monetary or fiscal policies. When used excessively, such policies can lead to a decline in demand for goods and services.

A sharp increase in oil prices can be a harbinger of a coming recession. As energy becomes expensive, it pushes up the overall price level, leading to a decline in aggregate demand.

As businesses and households face difficulties in meeting their debt obligations, they reduce investment and consumption, which in turn leads to a decrease in economic activity.

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