Debt distress to far outgrow global mitigation efforts

Significance

The debt problem is more serious, and the tools available to deal with it less developed, than often assumed. To develop plans to deal with debt problems, the international community will need to overcome geopolitical divides.

Impacts

• The debt problem of developing economies is more serious than the subset of it that policy makers and market participants usually discuss.
• Policymakers must seek ways of helping low-and middle-income countries escape the cycle of large debt build-ups followed by crises.
• Non-financial corporate debts in emerging markets are large and there is no global template for dealing with crisis in this sector.