The Hidden Debt Burden of Emerging Markets
LIMA – As central bankers and finance ministers from around the globe gather for the International Monetary Fund’s annual meetings here in Peru, the emerging world is rife with symptoms of increasing economic vulnerability. Gone are the days when IMF meetings were monopolized by the problems of the advanced economies struggling to recover from the 2008 financial crisis. Now, the discussion has shifted back toward emerging economies, which face the risk of financial crises of their own.
Chinese lending to Brazil was closer to 1% of GDP, while lending to Mexico was comparatively trivial.
But actual disbursements may have fallen short of the original plans, meaning that these countries’ debts to China are lower than estimated. Alternatively – and more likely – the data may not include some projects, lenders, or borrowers, meaning that the debts could be much higher.