EM sovereign debt 2021 outlook; EMEA leading from the front: The MUFG Global Markets Podcast

2021-01-29

Emerging market (EM) debt witnessed a rapid accumulation in 2020 totalling as economic activity came to a sudden pause on the back of the pandemic with EM sovereigns navigating acute fiscal shocks. Ehsan Khoman, Head of Emerging Markets Research (EMEA), envisages 2021 to be not much different than last year, with his forecasts pointing to EM gross sovereign issuance at ~USD140bn, with EM EMEA set to remain the dominant force with an anticipated USD83bn of external debt. He contends that the one...

Emerging market (EM) debt witnessed a rapid accumulation in 2020 totalling as economic activity came to a sudden pause on the back of the pandemic with EM sovereigns navigating acute fiscal shocks.

Ehsan Khoman, Head of Emerging Markets Research (EMEA), envisages 2021 to be not much different than last year, with his forecasts pointing to EM gross sovereign issuance at ~USD140bn, with EM EMEA set to remain the dominant force with an anticipated USD83bn of external debt.

He contends that the one of the most critical economic legacies of the pandemic is whether the hastened rise in public debt stocks stemming from the unprecedented fiscal easing will magnify EM’s structural growth challenges over the medium-term. A consequence of which could steadily increase the risk premium being commanded by investors.

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