Problems of the Global Economic Recession and Strategies for Facing It: An Islamic Economic Perspective

Abstract

This research aims to examine the problem of global economic recession, which still occurs cyclically, and strategies to overcome it from an Islamic financial perspective. This article is a type of qualitative research with a library approach. Data was collected from library sources, books, journals and other encyclopedias. Data analysis uses descriptive analysis. The research results show that the problem of contemporary global recession has been marked since the emergence of the Covid-19 pandemic to the Russian-Ukrainian geopolitical war, which caused a drastic decline in global economic activity, triggered shortages of essential commodities, inflation, and unemployment problems due to the United States Central Bank's policy of raising interest rates. The policies implemented by conventional economics have little effect in overcoming existing economic issues. The application of interest policies is strictly prohibited by Islamic law because it constitutes usury. The Islamic financial system is here to provide various strategies that can be implemented to overcome the economic crisis and build an advanced and healthy economy, the primary sources of which come from the Qur'an and Hadith.