Economy
Zombie Company
Definition
A company that earns just enough to service its debt but cannot invest, innovate, or grow — kept alive by low interest rates rather than profitability.
Explanation
Zombie firms proliferated during the ultra-low rate era (2010-2022). The BIS estimates 15-20% of listed firms in advanced economies are zombies. They tie up labor and capital that could be used more productively, dragging down aggregate productivity. Rising rates should force zombies to restructure or exit, but the transition creates short-term pain.