Article

New wave of Emerging Market debt poses risk to global economy

Global Economics and Markets Newsletter January 2020

The global themes covered in Family Consulting’s January 2020 Global Economics and Markets Newsletter include emerging market debt which has risen rapidly since 2010 and the current global economic environment is making it harder to service. Despite the Phase-One trade deal, the tariffs on US and Chinese imports will remain near recent highs which will remain a headwind to global trade and it is clear that the trade war has effected business investment in the US.

According to a study published by the World Bank in its latest Global Economic Prospects report, the global economy is experiencing the fourth wave of broad-based debt accumulation in 50 years. There were three historical waves of debt accumulation: 1970-89, 1990-2001, and 2002-09 and each one of these waves ended in a financial crisis across both developed and developing economies. The fourth wave began in 2010. In 2018, global debt reached a record high of about 230% of global GDP with total developing economy debt reaching an all-time high of almost 170% of GDP, an increase of 54% of GDP since 2010. The debt buildup in developing economies debt in this fourth wave has already been larger, faster, and broader-based than in any of the previous three waves.

 

This newsletter explains the following topics;

This Month’s Big Themes

  • Emerging Market Debt
  • US-Chinese after the ‘Phase-One’ deal
  • Effects of the trade dispute on the US economy
  • Trilateral Trade Talks
Country/Regional Update 
  • Japan
  • United States
  • China
  • Eurozone
  • United Kingdom
  • Singapore
Capital Markets
  • Equities
  • Commodities

 

(212KB, PDF)

* This Article is based on the relevant Japanese or specific country’s tax law and other authorities in effect on the date of this Article. This Article would not be guaranteed updating if there are any changes in Japanese tax law, any other law, or interpretations by the courts or tax authorities thereof after the date of this Article.

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