Japan’s growing debt overhang adds to zombie threat
Business failures in Japan have been stemmed thanks to massive government and bank liquidity support. However, there’s mounting concern regarding debt overhang: A survey of small firms shows that 34% find their debt excessive and that 14% already had excessive debt prior to the pandemic.
What you will learn:
- Some evidence of debt overhang and a rise in zombie firms.
- Relatively healthy small firms will voluntarily close business.
- Debt-overhang and zombies will weigh on bank profitability and productivity.
BoK’s monetary policy to tighten even as hiking cycle ends
Even without rate hikes, central banks' monetary policies can effectively tighten if the nominal neutral rate falls below the policy rate. We expect this will be the case for the Bank of Korea this year, as the gap between the policy rate and the nominal neutral rate widens.Find Out More
China: Emerging green shoots in Spring, but not out of the woods
We now incorporate a faster recovery from the post-Covid exit wave and raise our 2023 full-year GDP growth forecast to 4.5% (from 4.2% previously).Find Out More