Emerging markets do not face a systemic sovereign debt crisis, though many poorer nations do face big challenges, Gita Gopinath, the International Monetary Fund's (IMF) first deputy managing director told a panel in Washington on Tuesday.
Speaking at an event during the annual IMF World Bank meeting, Gopinath said some 60% of low income countries were either already in debt distress or in high risk of debt distress.
"To be clear, it's not as though we have a systemic sovereign debt crises there," Gopinath said.
"The vast majority of emerging market economies are nowhere near there, but on the other side, we do have many countries, several of whom, for instance, are in Sub-Saharan Africa, where this is a major challenge."
Speaking at the same event, Elena Duggar, managing director of credit strategy & research at ratings agency Moody's, also said she did not expect a widespread debt crisis across emerging economies, but predicted more countries would have to overhaul their debt burdens.
"Emerging markets are looking at a less supportive, external environment in terms of tighter financial conditions and slower growth," said Duggar. "And we're looking at high uncertainty and high risks in the economic environment and the possibilities of much deeper economic contractions, which normally translates into financial market volatility and episodes of stop and go market access - so this will mean an elevated default rates."
(Reporting by Karin Strohecker; editing by David Evans)
