The Intelligence from The Economist Submerging markets: developing economies and covid-19
Apr 30, 2020
Simon Cox, The Economist's Emerging Markets Editor, shares insights on the severe economic impacts of the pandemic on developing economies like Lebanon and Zambia. He discusses how COVID-19 has widened the gap between rich and poor nations, with increasing debt and investor uncertainty complicating recovery efforts. The emotional toll on caregivers and dementia patients during this crisis is also highlighted, alongside a fascinating look at how lockdowns have transformed language learning, blending technology with personal interaction.
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Emerging Market Debt Vulnerability
- Emerging markets face unique debt challenges due to pandemic-related economic vulnerability.
- Their dependence on foreign currency debt makes them susceptible to exchange rate fluctuations and higher risk premiums.
Economic Headwinds for Emerging Markets
- Emerging economies are economically vulnerable to the pandemic due to various factors.
- These factors include reduced export earnings, plummeting tourism, and strict lockdowns.
Reshuffling of Emerging Markets
- The pandemic will likely widen the gap between stronger and weaker emerging economies.
- Some can borrow at low yields, while others face default and long-term distress.