This weekâ€™s continuation of OANDAâ€™s review of the relationship between sovereign debt levels and credit ratings is based on a group of countries collectively referred to as the â€œemerging economiesâ€. This is an eclectic assortment of nations ranging from relatively primitive economies such as Pakistan or Indonesia, all the way up to China, the worldâ€™s second largest economy.
Comparing this group to the previous infographic on the debt problems facing many Eurozone countries, the term â€œemergingâ€ seems somewhat misplaced. Most countries listed here have very manageable debt loads that would be the envy of several of their European counterparts. The more established countries have comparable credit ratings with Hong Kong and Singapore holding down top-level triple A approvals while most of the others fall solidly within the top tier of the â€œInvestmentâ€ grade.
Emerging Refers to Future Potential
â€œEmergingâ€ in this sense refers to the future potential for these economies to continue to grow, and nowhere is this more evident than China. In the past year, China surpassed Japan to become the worldâ€™s second largest economy and continues to expand at an annual rate far surpassing western economies. For this reason, China is being hailed as the â€œengineâ€ for the global and, together with some of the other countries listed in the following illustration, is seen as the driving force for the global economy for the near term.
Created by OANDA
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