Debt-distressed countries more likely to turn to non-traditional bailout options, according to WTW’s political risk index
29 Novembro 2023 - 8:00AM
High government expenditures during the pandemic, coupled with
global inflation and increased interest rates in 2023, have
contributed to an escalating debt crisis in emerging markets. This
is according to the latest Political Risk Index report released by
WTW (NASDAQ: WTW), a leading global advisory, broking, and
solutions company.
The report details how political challenges may make it
increasingly difficult for multilateral institutions, including the
International Monetary Fund (IMF) and the World Bank, to play their
traditional crisis management roles, which could heighten the
political and economic risks associated with debt crises. Other
findings include:
- Cuts in government spending are
likely to trigger protests linked to austerity, which are already
on the rise particularly in low-income countries
- Countries with a high ratio of
public interest payments to public revenue may be most vulnerable
to sovereign debt crises in the near to medium term
- Partly because of intensified
geopolitical competition, the politics of sovereign debt
restructuring following debt crises have become increasingly
complicated with countries more likely to turn to non-traditional
bailout options as a result
- Climate change is likely to become
an increasingly important driver of crises of debt sustainability,
necessitating reform of the international debt and financial
architecture
Evan Freely, Global Head of Financial Solutions, WTW, said: “A
conveyor belt of economic shocks has hit the world’s most
vulnerable countries hard. Emerging market governments may look for
less transparent short-term financing, accepting higher interest
rates in return for fewer conditions, however this increases both
humanitarian and business risks. This report indicates that
geopolitics is complicating an already difficult situation, and
these trends should be carefully monitored from a risk management
perspective.”
This edition of the WTW Political Risk Index features research
conducted by the geopolitical consultants at Oxford Analytica and
the credit insurance group Credendo, as well as WTW’s trade credit
and political risk teams. The complete report can be downloaded
here.
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you.
Learn more at wtwco.com.
Media contact
Sarah Booker: +44 7917 722040Sarah.Booker@wtwco.com
Willis Towers Watson Pub... (NASDAQ:WTW)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Willis Towers Watson Pub... (NASDAQ:WTW)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024