An economy that is growing very quickly, with the risk of high inflation. Bloomberg Financial Dictionary
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if an economy overheats, demand rises too fast, causing prices and imports to rise, a situation that governments may try to correct by raising taxes and interest rates:
• Lifting economies out of recession is easy compared with deciding when to re-apply the brakes so the economy does not overheat later.
• Germany overheated its economy as it poured money into rebuilding the East.
— overheating noun [uncountable] :
• Economic growth is modest, with little fear of overheating.
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overheating UK US /ˌəʊvəˈhiːtɪŋ/ noun [U]
► ECONOMICS, FINANCE too much very fast growth in an economy, with the result that prices increase too quickly: »
The central bank has raised interest rates in an attempt to prevent overheating and recession.
Financial and business terms. 2012.