Capital Flight refers to the rapid outflow of large sums of money or assets from a country.
Definition
This movement of funds from one nation to another often occurs due to perceived risks or better opportunities abroad.Explanation
It describes when investors and citizens move their money out of a domestic economy, involving various assets like cash or investments.Causes
Primary causes include political instability, economic uncertainty, high domestic taxes, and fears of currency devaluation. Seeking higher foreign returns also contributes.Consequences
Impacts are severe: reduced domestic investment, a weakening local currency, slower economic growth, and depleted foreign exchange reserves.Author
