JP Morgan: Emerging markets governments debts jumps to record high

US investment bank JP Morgan said on Monday that emerging markets governments debts has jumped to record highs in 2020.

It is expected to continue to rise in the coming year as policymakers struggle to restart the economic activity that has been ravaged by the coronavirus pandemic.

In a note, bank analysts said that public debt of governments in 55 developing countries jumped to an all-time high of 59.0% of GDP in 2020, and that levels outside China rose to 57.7%.

They added that private sector debt in emerging markets also jumped to an all-time high of 146.8% of GDP, approaching the level seen in developed markets, where the average is 161%.

Excluding China, the overall ratio of debt levels across emerging markets rose to 89.9%.

"The Covid-19 shock led to the largest annual increases in both emerging market government and private sector debt as a percentage of GDP," JP Morgan analysts wrote in the note.

The bank also said that the vast majority of public and private debts remain domestic, as domestic debt constitutes 87% of government public debt and 94% of private sector debt.