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Emerging markets total debt approaching 200% of GDP, cautions IIF

November 2015

November 10, 2015 | 10:40 | Washington, D.C.

Global debt across the household, government, financial and non-financial corporate sectors has risen by around $50 trillion since 2009, surpassing $240 trillion (or 320% of GDP) in early 2015. The rise has been much more pronounced in emerging markets, where total debt has risen by $28 trillion to 195% of GDP, the Institute of International Finance said in its new Emerging Market Debt Monitor.

EM debt monitor tracks sectoral indebtedness and external debt across 18 key emerging market countries.

Non-financial sector indebtedness has exceeded 225% of global GDP ($173 trillion). The build-up in global debt has been mostly driven by the

public sector in mature markets and the non-financial corporate sector in emerging markets—both have risen by $13 trillion since 2009.

In the aftermath of the 2008 global financial crisis, the rise in public sector debt in EMs has been limited both compared to that of mature markets and relative to other non-financial sectors in emerging markets. South Africa and Korea have recorded the largest increases in their public sector debt-to-GDP ratio since 2010, while Turkey, Saudi Arabia, Hungary, Poland and India have witnessed a decline, IIF said.

 

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