Emerging Market Nonfinancial Corporate Debt

Emerging Market Nonfinancial Corporate Debt

How Concerned Should We Be?

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Some analysts believe that the growth of nonfinancial corporate (NFC) debt originating in the emerging markets could possibly result in global systemic contagion. Economists Daniel Beltran, Keshav Garud and Aaron Rosenblum dissect the issues surrounding NFC debt in the developing countries, which has skyrocketed since 2008. Although the authors don’t offer any solutions, they spin a convincing argument that the problem may not be as bad as it seems. getAbstract recommends this scholarly offering to executives, policy experts and financial professionals.


From 2007 to mid-2016, business leaders in emerging market economies (EMEs) caused the level of nonfinancial corporate (NFC) debt to balloon to about $25 trillion – some 112% of their nations’ combined output. China has played an outsized role in accumulating these liabilities, as its NFC debt now stands at 170% of its GDP. For all other EMEs, the debt averages less than 60% of GDP. The overall borrowing level exceeds that seen prior to the 1997 Asian financial crisis. However, the percentage of debt held in a currency...

About the Authors

Daniel Beltran and Aaron Rosenblum are economists for the Board of Governors of the Federal Reserve System. Keshav Garud is a PhD student in economics at the University of Michigan.

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