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.
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…
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