Although the situation varies considerably from one country to another, non-financial corporate debt in EMDEs as a group is at present comparable in magnitude to that of these countries’ sovereigns as, by some accounts, it has risen from about 60 percent of GDP in 2006 to 86 percent in 2017, reaching an all-time maximum at levels considerably above pre-crisis levels.
Although the bulk of the increase is explained by China, whose corporate sector debt rose from 107 to 163 percent of GDP during the same period, a similar trend is observed in many other EMDEs.8 The increased leverage of EMDE non-financial corporates acquires particular relevance as a source of concern for at least a couple of reasons.