Though a recession is an inevitable component of the economic cycle, it is inevitably succeeded with economic recovery at some point. During the recession, the employment level, discretionary income, and overall consumer spending fall looming hard times for businesses and their employees. All these declines start going up during the recovery signalizing that it is once again safe to hire people and expand industrial capacity. The unemployment rate usually lags a little behind during the recovery. It happens as businesses hesitate to reinvest straight after the downfall.
In a business cycle, it is always necessary to halt the recession and carefully plan the recovery. Plummeting economies always have a difficulty to revive their GDP and heavily depend on international loans. But the stage of recovery brings more hidden pitfalls. Inflation comes naturally as a sign of improving the economy but only when it is low enough not to smash the purchasing power of consumers. Viral inflation is a threat to the recovering economy and it shall be curbed by adopting a suitable fiscal and monetary policies. Controlled inflation that does not exceed 6 percent can boost economic recovery stimulating the domestic market. Only when the recovery is durable or uncontrollable, inflation can destroy the achieved growth.
The tempo of economic recovery depends on numerous policies influencing businesses, banks, and investors. During the global crisis, rather few countries experienced fast economic recovery, among them the US and China. Italy and Greece, on the contrary, have seen their economies grow and decline again. They still try to recover from the economic decline, which is not easy to do with a heavy burden of international debt.