The non-financial corporate (NFC) sector in emerging markets and developing economies (EMDEs) entered the pandemic with elevated financial vulnerabilities and corporate debt currently stands at record levels: the World Bank estimates that non-financial corporate debt for EMDEs stood at 39.1 percent in 2019,1up from 34.9 percent in 2010; the BIS estimates a much higher level of 102 percent for a group of large EMDEs2in 2020Q1, up from 71 percent a decade ago. Against the backdrop of a global recession that has turned out deeper than expected for most EMDEs, a prolonged period of reduced earnings induced by the COVID-19 pandemic may give way to corporate solvency problems.
Credit markets in EMDEs were heavily affected by the COVID-19-indu…
Read the full article at: https://blogs.worldbank.org/allaboutfinance/covid-19-and-corporate-balance-sheet-vulnerabilities-emerging-markets