To have low Economic growth, certain factors that affect are unemployment and poverty. Although, these statistics does not conclude the fact, as in the year of 2010-13 The United Kingdom was having low pace of Economic Growth, but vice versa unemployment went down.
To prove the fact that low economic growth will create unemployment certain facts are as follows:
Economy is low, people will have less demand, it will affect the productivity and production will be less, fewer workers will be required which will contribute in creating unemployment.
Many organisation face bankruptcy due to recession and thus ultimately employee can get fired.
Organization will not be willing to hire workers due to low economic growth and thus creating negative growth and insecurity (Smith, 1994).
To calculate the economic growth in calculation and numbers, but these are not just numbers which can create a big hole in the economy of the nation. Even if the low economic rate is for a week, it will cause a major loss for many more days. These sneaky losses are the major loss for nation and thus penetrating in the people’s life. So, it is false saying that “low economy rate is appreciating factor for country’s development”.
In today’s world technology is much more important for the betterment of living both in developed and developing country, a country can experience growth if there will be advancement in the technology because in these days most of the work of the developing countries are based on the technology used by the workforce. The implementation of the technology is done because it will decrease the amount of labour price and decrease the production time which automatically produce more and grow more. Technology hence improves labour production.
In United Kingdom the growth had slowed down by 0.3% in the final quarter which was less than 0.7% seen in the second quarter. Lower the Economic growth had also affected the major Restaurants and Hotels, due to such the cost of living of the common people had also increased. It had also affected the manufacturing sectors, hitting transport and other industrial-related services.
Diminished prospects for potential development in the medium term have essential ramifications for arrangement. In cutting edge economies, lower potential development makes it harder to decrease still-high open and private debt. In developing business sector economies, lower potential development makes it more difficult to remake monetary cradles (Warrier, 2009).
There will be the rise of indefinite problems when there will lowering of the economic growth in the countries. One of the significant effects will be the loss of jobs of the people who are working in the manufacturing units. The penetration of the imported products in the market will also affect the job opportunities in the country. The regional economic growth of the country will also intensify when there will be lack in the mobility of the labour.
Monetary policies have played a key role in helping economies around the world bounce back from the Great Recession of 2007. The debt-to-GDP ratio measures a country’s debt to its economic output. The higher the ratio, the more difficult it is to pay back the national debt. In these trying times, when business investment is falling and consumers are not willing to spend, state, local, and federal governments have to open their purse strings in order to either maintain or resuscitate the economic output. A large portion of that amount of spending may come from borrowed money either from the public by issuing bonds or from external borrowing. This leads to a rise in the debt-to-GDP ratio. A fiscal policy will also nullify several benefits from a loose monetary policy.
In this Globalised world where all the country works on one platform i.e. at corporate stock exchange price, slower growth in consumer spending and residential investment will also lead to a smaller rise in corporate profits. It is said that the slowdown in corporate profit growth could be lessened in the years to come if another up cycle for commodity prices materializes. As profits are a key factor in stock price movement, slower profit growth could lead to weaker growth potential for stock markets in the coming decades.