LONDON: Developing countries have nearly tripled their external debt over the past decade, outpacing economic growth and increases in foreign exchange reserves – which could leave them open in the future to a “systemic crisis”, ratings agency Moody’s said on Thursday.

Emerging market governments and companies around the globe have rushed in recent years to take advantage of rock-bottom global borrowing costs and investor hunger for yield.

As a result, external debt jumped to $8.2 trillion in 2015 from $3.0tr in 2005, the Moody’s report found, thanks largely to private-sector borrowing. The average ratio of external debt to gross domestic product jumped to 54 per cent in 2015 from a decade-low of 40pc in 2008.

Published in Dawn, July 22nd, 2016