The Aftermath of Debt Surges

Author(s): M. Ayhan Kose Franziska Ohnsorge Carmen Reinhart Kenneth Rogoff
Publication Number: ECES-SB182
Issued in: 2021

Debt in emerging market and developing economies (EMDEs) is at its highest level in half a century. In about nine out of 10 EMDEs, debt is higher now than it was in 2010 and, in half of the EMDEs, debt is more than 30 percentage points of gross domestic product higher. Historically, elevated debt levels increased the incidence of debt distress, particularly in EMDEs and particularly when financial market conditions turned less benign.
This paper reviews an encompassing menu of options that have, in the past, helped lower debt burdens