Hard Landing

A Hard Landing describes an Economy which had been enjoying sound growth, then suffers a harsh decline. The decline in the economy could be due to the measures taken to temper the economy being too severe.

The term Hard Landing is a term used to describe an economy, quickly moving from growth to a pronounced decline in economic activity or potentially a recession. A Hard Landing could occur when the actions taken to prevent an Economy from overheating leads to a pronounced slowdown in economic activity. The reversal in economic fortunes can occur despite all the best efforts by a country’s authorities, Policy Makers and the Central Bank to successfully manage or moderate a slowdown in the economy. A Hard Landing, becomes more prevalent when economies move towards rapid “boom and bust cycles”. An economy that experiences a Hard Landing, or rapid slowdown, is not necessarily referring to an economy in a state of recession.