Emerging Markets: Trade Tensions and Debt Challenges

Emerging markets face rising debt and slow growth due to trade uncertainties. Indermit Gill, World Bank's chief economist, advocates cutting tariffs to boost growth. Concerns are heightened by U.S.-China tariffs, with global growth forecasts down. High debt limits spending on essential sectors, urging strategies for tariff negotiations.

Emerging markets and developing countries are grappling with increasing debt and sluggish growth compounded by spiking trade uncertainties, according to Indermit Gill, World Bank's chief economist. He suggests that reducing tariffs could significantly boost these economies.

Global economists have been adjusting their growth predictions downward for advanced economies and to a lesser extent for developing countries due to recent tariffs by U.S. President Donald Trump. The International Monetary Fund's recent forecast cut underscores threats to global growth, highlighting further economic slowdown risk.

Gill emphasizes that high debt levels are constraining budgets for education and healthcare, as debt servicing demands grow amidst sustained high interest rates. He advises developing countries to negotiate lower tariffs with the U.S., a move poised to lift growth significantly according to World Bank modeling.

(With inputs from agencies.)