Economics
Fitch Says EM Is Vulnerable as Debt Balloons to $19 Trillion
- Sees Fed raising rates no less than six times by end ’19
- Issuer refinancing risk may arise if EM appetite reverses
UBS Says Markets View EM as `Catching a Falling Knife'
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Debt levels that quadrupled in a decade have made emerging markets vulnerable to tightening financial conditions in the era of rising U.S. interest rates, Fitch Ratings said.
Outstanding debt securities from developing nations have ballooned to $19 trillion from $5 trillion a decade earlier, the credit-rating company said in a report. Despite the development of local-currency bond markets, borrowers will be hobbled by higher external borrowing costs, a stronger dollar and slowdown of capital inflows, it said.