Smaller economies' medium term default risk could have risen
Some of the world's smallest economies, especially in Africa, could be at increased risk of being unable to pay their debts in the medium term, even as developing nations have emerged from a series of sovereign defaults, financial adviser Lazard said. Investors do not expect more sovereign defaults in 2025, but credit metrics for smaller and riskier countries, known as frontier markets, point to a structural weakening, especially for governments in Africa, Thomas Lambert, of Lazard's sovereign advisory team, said. Markets expect it to be steady until June as Donald Trump's second administration has left the policy backdrop extremely uncertain.
