Trough
Topic: Economic Growth Theories and Business Cycles · NCERT: Beyond NCERT
Meaning
The trough is the lowest point of a business cycle. It marks the end of the contraction phase. After the trough, the economy begins its recovery. Output, jobs and investment are usually at their weakest at this point.
Example
India's GDP fell by about 24% in Q1 (April-June) of 2020-21 during the COVID lockdown. This was the bottom of the downturn. The fall was smaller in Q2, and growth rebounded to 9.4% in 2021-22 (NCERT figure, later revised).
Don't confuse with
- Peak: the peak is the highest point of the cycle and marks the start of a contraction. The trough marks the end of one.
Related concepts
- Business cycle
- Expansion
- Overheating
- Goldilocks economy
- Peak
- Recovery
- Soft landing
- Economic slowdown
- Growth recession
- Recession