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Economics
Zombie Company
A company that earns just enough to pay interest on its debt but not enough to repay the principal or grow.
Zombie companies tie up capital that could be used by healthier businesses. They drag down productivity. When interest rates rise, many zombies finally fail, which can cause short-term pain but long-term economic cleansing.
It's a business that's technically alive but only surviving on life support from cheap loans.
Real world: After years of ultra-low interest rates, many weak retailers or manufacturers could only pay interest. They became zombie companies — unable to invest or grow but kept alive by banks rolling over loans.
💡 Zombie companies look alive but are actually holding the economy back.