Developing countries have yet to feel the full economic impact of the coronavirus crisis but will not be able to rely on the world’s leading central banks for support as they scale back their pandemic-era stimulus, the head of the Bank for International Settlements has warned.
Agustín Carstens, general manager of the BIS, the bank for central banks, said developing economies are close to exhausting their capacity to borrow and to use fiscal and monetary policy.
“They have to start facing the music of how to get growth going [with] all these things working against them . . . reduced fiscal space, they don’t have monetary space, they have higher corporate debt and higher sovereign debt,” as well as an entrenched low capacity for growth, he told the Financial Times.