标题: CFAI Reading 4.4.3 Emerging markets LOS k [打印本页] 作者: spartan1 时间: 2013-4-17 18:21 标题: CFAI Reading 4.4.3 Emerging markets LOS k
Could someone please help me out please…
CFAI makes a number of comments in this reading regarding emerging markets.
…Comment below…(relevant checklist question proposed by CFAI)
…fiscal debt to GDP… 4% is a concern (fiscal policy)
…deficit 4% of GDP probably uncompetitive…(competitiveness)
…small current account deficit on the order of 1-3% of GDP is probably sustainable (competitiveness)
…ratio of foreign debt to GDP 50% is dangerous…(external debt)
Does the term fiscal debt have the same meaning as deficit?
Is deficit (comment 2) the same as current account deficit?
Can foreign debt (debt owed by private sector and govt combined) be 50%?
E.g. If the emerging country has fiscal debt equal to 3% of GDP. Is it possible that including external debt of the private sector sector could increase the foreign debt to 50% of GDP?
Any help would be greatly appreciated.作者: DoubleDip 时间: 2013-4-17 18:21
High fiscal deficit to GDP ratio means that Govt. is on a spending spree funded by borrowing and there may not be enough monies to borrow for private corporations (crowding out). Real interest rates may rise effecting competitiveness and growth of economy. Also what matters is where Govt. is spending the borrowed money? To build infrastructure or to pay salaries to its bloated work force? Fiscal deficit may not be bad after all if it contributes to infrastructure development and competitiveness; private partnership may as well turn out another alternative.
Current account deficit / net imports may improve efficiency in long run if you are importing capital goods, technology etc.
Additional concern for foreign debt is adverse currency movements.作者: jim8z3 时间: 2013-4-17 18:21
Thanks very much for the prompt and thoughful response, it was very much appreciated.
