The ranking examines the vulnerability of selected economies across four potential sources of peril – public debt, foreign debt and cost of borrowing and reserve cover.
The Economist calculated their likely foreign payments this year (their current-account deficit plus their foreign-debt payments) and compare this with their stock of foreign-exchange reserves. A country’s rank on each of these indicators is then averaged to determine its overall standing. Vietnam is in the safe group thanks to stable and strong financial indicators.
Accordingly, more than 30 emerging economies are facing great pressure, the worst being Lebanon and Venezuela. Botswana tops the list of the safe economies, followed by Taiwan (China) and the Republic of Korea. The Economist said that most of the economies were strong enough to overcome the pandemic. The 30 weakest economies was relatively small, accounting for only 11% of the total GDP of the 66 economies.
It said the COVID-19 hurts emerging economies by locking down their populations, damaging their export earnings and deterring foreign capital. Even if the pandemic fades in the second half of this year, GDP in developing countries, measured at purchasing-power parity, will be 6.6% smaller than the IMF’s forecast in October, states the report.
VNA
