Definition: Demand risk
National accounts
“Demand risk” covers the variability of demand (higher or lower than expected when the contract was signed) irrespective of the performance of the private partner. In
other words, a shift of demand cannot be directly linked to an inadequate quality of the services provided by the partner. Instead, it should result from other factors, such as the business cycle, new market trends, a change in final users’ preferences, or technological obsolescence. This is part of a usual “economic risk�� borne by private entities in a market economy.
Source:
Eurostat, "Long term contracts between government units and non- government partners (Public-private-partnerships)"; (2004 edition), Office for Official Publications of the European Communities, 2004, Luxembourg
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