The debt burdens carried by emerging markets have become a regular feature of reports about threats to financial stability. The total debt for 30 large EM countries reached $72.5tn in 2019 — a 168 per cent rise over the past 10 years, according to BIS data. This figure certainly merits watching. However, a deeper analysis of the numbers suggests a less worrisome picture.

The $73tn figure includes Hong Kong and Singapore, which are small, wealthy economies that should probably not be grouped among EMs. The data also includes financial sector debt that typically double-counts borrowing by other sectors of the economy.

The data includes China too, which is a special case, both for its overwhelming size and its speed of economic and debt growth. The country now accounts for nearly 60 per cent of total EM debt and about 80 per cent of the growth in EM debt over the past five years.