The alternatives are hardly compelling. The spread, or additional yield, over Treasury bonds offered by American corporate bonds is close to its pre-pandemic low and not far from its all-time low. For a given credit rating, an investor can usually get a wider spread over Treasuries by buying the dollar bonds issued by an emerging-market sovereign, says Yacov Arnopolin ofThere are reasons for the discrepancy.
The debt burden and maturity profile only get you so far. There are three other influences that investors might usefully bear in mind. The first is commodity prices. The collapse in crude prices last year left a few oil-producing countries short of hard-currency earnings. It played a part in the troubles of Ecuador, one of six countries to default on its bonds last year. For a while it seemed likely that Angola, a highly indebted oil exporter, would follow suit.
The second factor is exposure to tourism. The hit to the industry from the pandemic played a part in the default of Belize and in stresses elsewhere, says Stuart Culverhouse of Tellimer, an emerging-market research firm. It might take years for tourism to recover fully. Therecently sharply downgraded its forecasts for the Caribbean economies. Sri Lanka has been dogged by fears of default, in part because it has heavy debts, but also because of lost income from tourists.
This article appeared in the Finance & economics section of the print edition under the headline "A tourist’s guide"
This sounds funny for me,,,IMF as an organization has failed,,,, you find a person in mud who is already on his knees way up to his legs then instead of helping him stabilize you push them deeper in the mud☹️☹️ that is what this silly organization is doing to Kenyan economy
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