An economic downturn is a period when the economy slows down, leading to reduced consumer spending, lower production, and increased unemployment. This can happen due to various factors, such as decreased demand for goods and services, rising interest rates, or external shocks like natural disasters or geopolitical tensions. During an economic downturn, businesses may struggle to maintain profits, leading to layoffs and reduced investment. Governments often respond with measures like stimulus packages or interest rate cuts to encourage spending and investment, aiming to stabilize the economy and promote recovery.