The unprecedented policy support deployed during the COVID-19 pandemic allowed nonfinancial corporations in many jurisdictions to navigate the pandemic shock relatively well. At the same time, the synchronised global monetary policy tightening cycle that started in early-2022 (recently reversed by several central banks) does not seem to have significantly affected corporates’ financial performance. Nevertheless, the risk of being complacent with elevated corporate debt levels in a world of high interest rates may bring about significant financial stability and economic costs for the world economy.
Corporate debt levels have increased or, at the very least, have remained very high in many countries,…
