Emerging countries have generally emerged weaker from the chain of crises that have affected the world economy since the start of the pandemic, which has pushed some of these countries, such as Argentina, Pakistan or Tunisia, into a difficult economic situation. The three countries, along with Sri Lanka, are, unsurprisingly, those whose situation has deteriorated the most in less than five years, according to a study by the Center for Global Development (CGD), called the Resilience Indicator. In fact, three of these countries are currently under an aid program from the International Monetary Fund (IMF), while the fourth, Tunisia, suspended negotiations with the institution, refusing to implement the reforms that the IMF recommended to validate obtaining of the loan.
In more general terms, 60% of the countries analyzed by the study now have a public deficit greater than 4%, that is, double that of 2019, the year of the previous study. Worse still, almost a third of the countries studied face a need for external financing close to 100%, that is, around a dozen countries, while only the four mentioned above were affected in 2019.
Deterioration of the economic situation in China and Colombia
If some countries already presented a worrying profile before the multiple crises of recent years, others, on the contrary, seemed largely protected, but have nevertheless seen their situation become somewhat complicated. This is, of course, first and foremost the case of China, which has been mired in a prolonged crisis in its real estate sector for more than three years, one of the main contributors to its growth (more than 30%), and which could now destabilize the financial sector. while public authorities, especially local ones, are today heavily in debt.
Colombia has also seen its situation deteriorate significantly, particularly due to a 20 percentage point increase in its debt ratio, while the country faces a higher level of inflation than other countries in the region and growth that remains weak. Therefore, the IMF forecasts inflation of 11.4% and growth of 1.4% for 2023.
In contrast, the economic situation remained solid in several emerging countries, primarily Indonesia, Peru, Thailand and Bulgaria, while Angola has experienced a period of significant improvement over the past five years, following a period of budgetary adjustment.
Source: BFM TV
