As if political turmoil, commodity-price meltdown and growth hiccups aren’t enough, emerging markets face a threat to their creditworthiness from an entirely different area — the burgeoning debt of households and companies.
Private-sector borrowing as a proportion of gross domestic product will reach 77 percent by the end of this year in seven large developing nations, Fitch Ratings said in a report Wednesday. Such liabilities have exceeded government debt levels, exposing their economies and financial systems to “downside risks,” London-based analysts Ed Parker and James McCormack said.
The countries — Brazil, Russia, India, Indonesia, South Africa, Turkey and Mexico — are seeing an increase in their private-debt burden in 2015 because of currency depreciation, according to the report. That may weigh on their governments’ credit ratings through weaker GDP growth, worsening budget deficits, pressure on foreign-currency reserves or further exchange-rate fluctuations, Fitch said.
Brazil Energy Insight 
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