EMEA emerging market sovereign debt-to-GDP ratio to rise over COVID-19 | ZAWYA MENA Edition

EMEA emerging market sovereign debt-to-GDP ratio to rise over COVID-19 | ZAWYA MENA Edition:

The fallout from the coronavirus pandemic on domestic demand and international trade will raise EMEA emerging-market government ratios of debt-to- GDP a median 8.2 percentage points in 2020, S&P Global Ratings said in a report.

S&P rates 53 emerging market sovereigns in the EMEA region. These sovereigns entered 2020 with higher public and private debt than in the run-up to the global financial crisis according to the ratings agency.

Since the start of 2020, S&P has downgraded 21 sovereigns globally (of the total 135 rated sovereigns). Ten of these downgrades were in emerging EMEA.

“While our house view is that by the end of next year a vaccine for the current strain of the virus will be broadly available in developed economies, enabling infection rates to converge rapidly toward zero, the possibility of lower access to a vaccine in some emerging sovereigns could delay the recovery,” the report said.