Business · Economy · 2 hrs ago
Zombie firms hold 21.4% of corporate debt in 10 Asian economies
The IMF warned that zombie firms pose a growing risk in Asia in its latest Global Financial Stability Report.
It examined China, India, Thailand, Indonesia, South Korea and five other Asian economies.
Zombie firms are companies that cannot cover even their interest payments.
Their share of corporate debt in the economies studied reached 21.4%, more than double its level in 2008.
The IMF said this could lead to more bad loans building up at banks and create structural risks for financial systems.
It also warned that the problem can weaken productivity across the region.
Zombie firms accounted for 21.4% of corporate debt across 10 Asian economies analyzed by the International Monetary Fund.
The IMF warned that the concentration of debt in firms unable to cover interest costs poses structural risks to the financial system.
The share of corporate debt held by zombie firms has more than doubled since 2008, when it was below 10%.
The IMF also linked these firms to declining productivity and a buildup of bad loans at banks.
- Who
- Zombie firms in 10 Asian economies, as analyzed by the International Monetary Fund.
- What
- They accounted for 21.4% of corporate debt in those economies.
- When
- The IMF report was released the day before the article’s October 14 publication.
- Where
- China, India, Thailand, Indonesia, South Korea and five other Asian economies.
- Why
- The IMF warned that zombie firms’ debt concentration creates financial-system risks and contributes to lower productivity.
This story does not have two clearly opposing sides.
Zombie firms held less than 10% of corporate debt in the economies analyzed.
The IMF released its Global Financial Stability Report, according to the article.
Hankyung published its report on the IMF’s findings.
- Debt share
- 21.4% of corporate debt
- Economies analyzed
- 10 Asian economies
- Earlier debt share
- Less than 10% in 2008
- Examples of economies
- China, India, Thailand, Indonesia and South Korea
- IMF report
- Global Financial Stability Report
1 source
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