Fitch Warns Emerging Markets of Brazil-Like Mess on Debt
- Borrowings by households, companies will surge to 77% of GDP
- Burgeoning private debt clouds creditworthiness, banks' health
This article is for subscribers only.
As if political turmoil, commodity-price meltdown and growth hiccups aren’t enough, emerging markets face a threat to their creditworthiness from an entirely different area -- the burgeoning debt of households and companies.
Private-sector borrowing as a proportion of gross domestic product will reach 77 percent by the end of this year in seven large developing nations, Fitch Ratings said in a report Wednesday. Such liabilities have exceeded government debt levels, exposing their economies and financial systems to “downside risks,” London-based analysts Ed Parker and James McCormack said.