Asias increased borrowing in recent decades has augmented the regions exposure to rising interest rates and heightened market volatility.
Borrowing by the regions governments, companies, consumers, and financial firms is well above levels prior to the global financial crisis, as we recently noted. In particular, industries that rapidly increased leverage while interest rates were low are now a key concern, especially in Asia. While we expect Asias growth to hold up, contributing two-thirds of global growth this year, central banks may keep rates higher for longer to tame inflation, and financial conditions may tighten further.
Highly leveraged companies face greater risk of default as monetary policies and financial conditions remain tig…
Read the full article at: https://www.imf.org/en/Blogs/Articles/2023/05/24/asia-must-monitor-rising-corporate-debt-amid-higher-interest-rates