In the 1970s, Latin American countries were inundated with cheap credit. A decade later, a debt crisis shook the continent. Indebted countries had to take out additional dollar loans for refinancing.
“finanzen.net” warns that a rapid increase in key interest rates by the world’s central banks is likely to put heavily indebted emerging countries in a precarious position. Rising raw material prices and the consequences of the corona pandemic do not bode well. Supply chains are coming under increasing pressure and inflation threatens to rise further. According to Ayhan Kose, this would create the conditions for stagflation – i.e. stagnating economic output with high inflation.