DEFINITION of 'Sluggish Economy'

A state in the economy in which the growth is slow, flat or declining. The term can refer to the economy as a whole or a component of the economy, such as weak housing starts.

BREAKING DOWN 'Sluggish Economy'

When the economy is in a sluggish state, it is generally harmful for a business since consumers and other businesses are less likely to purchase its products. A sluggish economy also has a negative effect on the labor market as businesses are less willing to hire more staff in times of weak economic growth.

Financial media often use the term "sluggish economy". For example, you will often see headlines like "Economy Sluggish due to Rising Oil Prices."

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