The Impact of High Inflation on Government Finances

We expect around 75% of non-investment-grade EMs to have wider deficits this year next year compared to pre-pandemic levels. The median increase in debt burden between 2019 and our forecast for the end of 2023 is almost 10 percentage points of GDP. This is broad-based, except for a handful of hydrocarbon exporters that are benefiting from higher oil and gas production and prices. So just a handful of exceptions. Of course, one notable one is Angola, where a combination of fiscal reforms and higher oil prices have resulted in fiscal surpluses and debt reduction.