Back to the complete issue
Sunday, 17 November 2019

Surging debt levels in emerging markets hit record USD 71.4 tn in 2Q2019 -IIF

Surging debt levels in emerging markets hit record USD 71.4 tn in 2Q2019 -IIF: Total debt owed by emerging market businesses, governments and households reached a record USD 71.4 tn in 2Q2019, amounting to around 220% of EM GDP, according to the Institute of International Finance (IIF). The Global Debt Monitor finds that EM debt has risen by USD 4.6 tn in the year to 2Q2019, having measured USD 66.8 tn in 2Q2018.

Sovereigns driving debt growth in EMs: Rising EM debt levels over the previous decade have been driven in large part by state-owned enterprises, which now account for more than half of all non-financial corporate debt. Bonds now make up 47% of all EM debt, up from 43% a decade ago.

Global debt levels to surpass USD 255 tn this year: The total amount of global debt surged by USD 7.5 tn in the first half of 2019, spurred by a wave of monetary easing by central banks across the world. Current levels are close to breaking a new record of USD 250 tn (or 320% of GDP), and are on track to exceed USD 255 tn by the end of 2019.

Soaring debt to limit fiscal stimulus options: “With diminishing scope for further monetary easing in many parts of the world, countries with high levels of government debt (Italy, Lebanon) — as well as those where government debt is growing rapidly (Argentina, Brazil, South Africa, and Greece) — may find it harder to turn to fiscal stimulus,” the IIF wrote.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.