Sources: Federal Reserve Bank of St. Louis; J.P. Morgan; Kose et al. (2021; 2022); Moodys Analytics; World Bank.
A. Median values. Values through 2023Q2.
B. Medians of annual average U.S. dollar bond yields minus trailing 10-year averages of nominal GDP growth in U.S. dollars. Non-investment grade sample is between 15 and 41 economies (of which, between 9 and 19 have weak credit ratings).
Building fiscal space means broadening government revenue bases and prioritizing public spending. Distortive and wasteful subsidies can be jettisoned, for example. On the monetary side, these economies can help themselves by putting in place credible exchange-rate systems and nurturing central-bank independence. These reforms will need to be complemen…
Read the full article at: https://blogs.worldbank.org/voices/silent-debt-crisis-engulfing-developing-economies-weak-credit-ratings