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February 2018

Which countries face corporate balance sheet vulnerabilities? a novel monitoring framework

Erik Feyen's picture

The debt of the nonfinancial corporate sector in emerging and developing economies (EMDEs) has risen significantly since the global financial crisis, raising concerns about financial stability and spillover risks. While monetary easing in developed economies has allowed EMDE corporates to raise substantial financing from global capital markets, the sharp decline in commodity prices since 2014 and lower growth prospects across EMDEs have weighted on their firms’ profitability and debt service capacity.

The current global environment raises questions. How vulnerable is the current financial situation of the EMDE corporate sector?  How has it evolved since the global financial crisis?