HOW THE MISUSE OF LEVERAGE CAN SEVERELY IMPACT THE ECONOMY: THE CASE STUDY OF EVERGRANDE AND LESSONS FOR UZBEKISTAN.

Abstract

This paper examines the negative and enduring impact of leverage in the economy resulting from its misuse. The China Evergrande Group crisis serves as an example of the severe troubles in the country’s economy caused by the misuse of leverage. Evergrande has been considered one of the world’s most powerful real estate companies, but it collapsed due to uncontrollable debt. Through this case study, socially available information and reports are explored, as well as focusing on the main mistakes in its capital structure strategy, causing an economic knock-on effect. This research can be helpful for Uzbekistan’s Economy since in many spheres, many institutions rely on debt. In order to avoid making this kind of serious problem, the topic of leverage should not be overlooked. The article emphasizes the essence of debt management, transparency, and the omission of the regulator, recommending key resolutions for policymakers and financial managers. As many say, every process could get a positive result if everything is in moderation, and the same applies to using leverage.