Economic risk

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Economic risk

In project financing, the risk that the project's output will not be salable at a price that will cover the project's operating and maintenance costs and its debt service requirements.

Economic Risk

The possibility that an economic downturn will negatively impact an investment. For example, launching a luxury product immediately before or during a recession carries a great deal of economic risk. Economic risk is closely related to political risk as government decisions impacting the economy may also affect an investment. For example, a central bank may raise interest rates or the legislature may raise taxes, and this may result in economic conditions impacting an investment.
References in periodicals archive ?
The FTSE 100 firm said the UK housing market was "positive" in the second half of 2017, but flagged that it was aware of potential political and economic risks.
Muscat, Aug 19 (ONA) The Sultanate obtained in the political and economic risk map for 2017 issued by MARSH, a company specialized in insurance and global risk management, an average score of 60-69 in political and economic risks.
Under the proposed regulations, where there is overlapping economic risk of loss for a partnership liability, each partner is deemed to bear the economic risk of loss in the ratio of the partner's economic risk of loss over the sum of the economic risks of loss borne by all the partners, as shown in the exhibit above.
Global Banking News-February 20, 2014--Bank of Japan to remain alert to economic risks
External economic risks consist of uncontrollable events such as supply shocks, currency fluctuations, trade deficits, natural disasters, and the health of the overall global economy.
The Canadian Mining Research Organization (CAMIRO) will begin work on three research deep-mining projects aimed at reducing geological, health and safety and economic risks associated with mining below 2,000 metres.
With all the requirements, however, the greatest problem companies face is that--if audited--they must provide evidence of the nature of the development activities and document the related technical and economic risks.
Opening a campaign to defeat a constitutional amendment that would require balancing the federal budget, Treasury Secretary Robert Rubin said Thursday that he planned to warn Congress today that it was on the brink of making ``a terrible mistake'' that would pose ``unacceptable economic risks to the nation.
This comes from the fact that a true sale must have occurred between the seller and buyer and a legal requirement of a true sale is that the buyer take some of the economic risks associated with owning the receivables.
Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, product development acceptance, the impact of competitive services and pricing and general economic risks and uncertainties.
Normally, in a general partnership, the partners bear the economic risks of the partnership in proportion to their stated loss interests under the partnership agreement, and they usually, but not always, share the recourse partnership liabilities in the same proportion.
Actual results could differ materially from those anticipated due to factors such as the lack of capital, timely development of products, inability to deliver products when ordered, inability of potential customers to pay for ordered products, and political and economic risks inherent in international trade.

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