May 24

Analysis: Rising Debt in Emerging Markets Could Push Back COVID Recovery and Widen Gap With Developed World

Yen Nee Lee

Swelling debt levels may cause emerging markets to fall further behind developed markets in the economic recovery from the Covid-19 pandemic, an economist said Monday.

“With the pandemic, debt rose across all types … the big increase of course was in government debt — and no surprise because of such a need to provide fiscal stimulus at the same time the tax revenues were down much across the board around the world,” Steve Cochrane, chief Asia-Pacific economist at Moody’s Analytics, told CNBC’s “Squawk Box Asia.”

“The real impact, however, I think is sort of an increasing divide between developed economies and emerging markets. The debt loads rose most in emerging markets and they may have the most difficulty in terms of taking care of this debt going forward,” he added.

Source: CNBC (link opens in a new window)

global development