The World Bank Group and the Global Emerging Markets (GEMs) Consortium are driving transparency and mobilizing private investment in emerging markets by publishing credit risk statistics that provide insights into the behavior of loans to emerging market firms over the past three decades.
The GEMs statistics underscore the feasibility of mobilizing more private capital for sustainable development by showing historical performance trends that challenge prevailing risk perceptions.
Two new reports were published in October 2024:
- Default and Recovery Statistics for private lending covering the period 1994 – 2023
- Default and Recovery Statistics for sovereign and sovereign guaranteed lending for the period 1984-2023
Note: Both reports are available on the GEMs website and on Bloomberg terminals.
With default rates comparable to many non-investment grade firms in advanced economies and recovery rates surpassing global benchmarks, GEMs shows that the risks of investing in emerging market firms are lower than might have been perceived.
Default rates averaged 3.56%, roughly comparable to average default rates in companies that receive a B credit rating from S&P and a B3 from Moody’s.
Recovery rates were also better than expected. At 72%, the average recovery rates surpass those reported for Moody’s Global Loans at 70%, Moody’s Global Bonds at 59%, and JPMorgan Emerging Market Bonds at 38%.
GEMs statistics are only one piece of the puzzle that needs to be considered when assessing risks and rewards. But despite the many caveats, this is a formidable set of statistics suggesting that the risks in emerging markets and developing economies may not be as high as often perceived.
The GEMs Consortium will continue with wide dissemination and promotion of their statistics, which will be published annually. Feedback on published reports, including the recent Analysis of Investor Perceptions and Market Demand study, will help inform future publications.
Co-founded by IFC and the European Investment Bank in 2009 as a community of practice within the multilateral/development finance institution family, the GEMs Consortium has grown to 27 members as of February 2025 and is expected to continue expanding.
Last Updated: Mar 06, 2025