The galactic recession refers to a financial crisis of a large scale that affected the entire galaxy. It began after the conclusion of the Galactic Civil War in 5 ABY and persisted until at least 9 ABY. This crisis heavily impacted the availability of essential resources such as medical supplies and food, while also placing significant strain on the economical infrastructure responsible for production and distribution.
Following the Battle of Endor, the economist Kriz Tray delivered a broadcast discussing the potential economic consequences of the Galactic Empire's apparent collapse. Tray argued that the primary challenge for the emerging New Republic would be establishing a stable credit system. He also suggested implementing anti-infiltration measures and upholding the Empire's previous contracts to maintain economic stability. Princess Leia Organa, watching Tray's broadcast during her honeymoon, expressed disagreement with his point about fulfilling the contracts.
After the signing of the Galactic Concordance and the end of hostilities in 5 ABY, the New Republic initially struggled to adapt to the abrupt transition from war to peace. The New Republic lacked the necessary funds to support the production and distribution of essential aid, including medical supplies and food, as well as to pay Rebel Alliance personnel before their demobilization. Furthermore, the infrastructure that had previously sustained the galactic economy was managed by worlds that had been Imperialized, such as Corellia. These worlds now found themselves under New Republic control but lacked the expertise to manage the infrastructure. Workers and laborers abandoned their positions due to the suspension of payments, leading to the disruption of food shipments, transport services, and infrastructure repairs.
As a consequence of the recession, bounty hunting became less lucrative because bounties were significantly reduced. This prompted Bounty Hunters' Guild Masters to assign multiple hunters to the same bounty simultaneously, a practice observed on the planet Nevarro around 9 ABY. Further complicating galactic commerce was a rise in piracy along isolated hyperspace routes during the same period. Specifically, a pirate group known as the Pirate Nation expanded its influence into the Mid Rim Territories while fighting the New Republic. Simultaneously, at least one pirate group, Gorian Shard's gang, received clandestine support from an Imperial remnant force.