Capital flight

Definition

Capital flight occurs when assets or money rapidly flow out of a country, due to economic instability or the expectation of political turmoil, affecting the country's financial health. It reflects a lack of confidence in the local economy and can lead to significant currency devaluation.

Related terms

Economic Stability: The condition in which an economy operates without excessive fluctuations in major economic indicators such as inflation, unemployment, and GDP growth rates.

Currency Devaluation: A deliberate downward adjustment to a country's currency value relative to another currency, group of currencies, or standard.

Political Turmoil: A state of confusion, disorder, or uncertainty in the political sphere, often leading to social unrest or government instability