The emerging-market debt binge

When investors worry about emerging markets, they tend to concentrate on the big global picture. Their main recent concern has been emerging economies’ vulnerability to tightening US monetary policy, which will prompt money to leave traditionally risky assets and head back to safer markets.

But many emerging markets have internal weaknesses too. In the past few years, households and companies throughout the developing world have gone on debt binges that easily rival the West’s spendthrifts.

It’s not just China. Private non-financial sector debt has reached 200% of GDP in Korea, compared to 180% in Australia and America, notes Société Générale [...]

MoneyWeek magazine

Latest issue:

Magazine cover
Hard cash

What's next for gold and silver?

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues
Shale gas 'fracking' promises to transform Britain's energy market. Find out what it is, what it means, and how to invest.

More from MoneyWeek

What you should really do with your money (2014 Edition)

How to buy and sell penny shares

A beginner's guide to investing in gold

How to invest in British fracking