Debt in Asia: anatomy, evolution, and prospects

This chapter presents an empirical overview of public, private, and external debt in Asian developing economies. It analyzes recent trends in debt ratios and their prospective sustainability, particularly in view of the coronavirus disease (COVID-19) pandemic and its aftermath. The chapter finds that the group of Asian developing economies stands out among other regional blocs for its moderate level of public indebtedness, high private debt, and low external liabilities. However, there is significant heterogeneity across these economies, and some exhibit significant debt burdens and attendant vulnerabilities. The debt outlook for Asian developing economies recognizes the impact of the COVID-19 pandemic, whose consequences are expected to continue over the medium term. Given the uncertainty of the path of economic recovery and the reversal of policy responses adopted to cope with the pandemic in 2020, the chapter assesses the outlook for public and external debt over the medium term on the basis of illustrative debt-dynamic simulations.