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Risks for emerging markets as advanced economies consider tightening

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Risks for emerging markets as advanced economies consider tightening

Friday 20 August 2021 – Vol.12 Ed.33.3

Commentary: Beware rolling back fiscal and monetary stimulus

By Urjit Patel in New Delhi

Advanced economy governments have performed a high-wire fiscal act, heavily supported by central banks’ ultra-loose monetary policies, to fight the Covid-related downturn. Emerging market economies will face considerable risks when tightening starts. Repercussions from premature tightening would be self-harming, as spill overs in EM economies would reverberate back to advanced countries – and the whole world would be worse off.

Read the full commentary on the website.

Podcast: Sovereign debt sustainability after Covid-19

Ludger Schuknecht, vice-president and corporate secretary of the Asian Infrastructure Investment Bank, and Dennis Shen, director of sovereign ratings at Scope Ratings, join John Orchard, CEO of OMFIF, to discuss sovereign debt sustainability in both developed and developing economies. They focus on the fiscal response to Covid-19, the debt ratio problem and its potential solution, the readiness of some countries to end their quantitative easing programmes and the best measures to keep in place to maintain fiscal sustainability.

Listen here.

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