If several larger emerging markets and low-income countries are simultaneously confronted with rising interest rates and an increasing reluctance by creditors to roll over their debts, a global debt crisis is likely to erupt. To avoid this scenario, an international agreement on how to support debt-distressed sovereigns is needed.
WASHINGTON, DC – In its latest World Economic Outlook, the International Monetary Fund reported that a rising share of countries – 56% of low-income countries and 25% of emerging markets – are “in or at high levels of debt distress.” While some of these countries are already working on reform programs that will make them eligible for IMF funding and offer good prospects for economic growth, many are not. A developing-world debt crisis is looming.
WASHINGTON, DC – In its latest World Economic Outlook, the International Monetary Fund reported that a rising share of countries – 56% of low-income countries and 25% of emerging markets – are “in or at high levels of debt distress.” While some of these countries are already working on reform programs that will make them eligible for IMF funding and offer good prospects for economic growth, many are not. A developing-world debt crisis is looming.