NETL - Beware The Zombies: How Weak Companies Will Consume The Economic Recovery

• As COVID-19 has spread across the globe, wreaking havoc, a financial pandemic has likewise proliferated around the world.
• Zombie companies, weak firms persistently unable to cover their fixed expenses with operating profits, massively increased in number in 2020.
• But zombie companies were already multiplying in the decades leading up to COVID-19.
• Zombie firms have increased because of indiscriminate government support and easy access to credit.
• Another important effect that zombie companies have on an economy is to increase competition, cause oversupply issues, and suppress consumer inflation.

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