December 9, 2022

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Emerging market debt ratio climbs back to record highs -IIF

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NEW YORK — Emerging markets’ debt-to-GDP ratio returned to record highs despite a $6.4 trillion decline in the global debt pile to $290 trillion in the third quarter due to a strong dollar and slowing bond sales, an Institute of International Finance report found.

Budget deficits and slower economic growth lifted the debt-to-GDP ratio in developing economies to 254%, matching a record high hit in the first quarter of 2021, the IIF said in its latest Global Debt Monitor published on Tuesday.

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The amount of overall emerging market debt, however, slipped to $96.2 trillion from $98.7 trillion the previous quarter. Meanwhile the global debt-to-GDP ratio fell for a sixth consecutive quarter, to 343% of GDP.

Soaring energy and food prices have continued to push interest rates and funding costs higher globally, while governments have ramped up spending to shore up economies.

High-yield borrowers have seen spreads widen by about 400 basis points on average this year…

Reuters

2022-11-22 11:00:51

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