Zombie firms in Asian EMEs cause disinflation in AEs – study
Spillover is transmitted to advanced economies via trade channels, BIS report says
Exposure to ‘zombie’ firms in Asia’s emerging markets significantly reduces inflation and growth in developed economies, a study from the Bank for International Settlements has found.
The working paper, published on September 3, uses data from 10 emerging market economies (EMEs) over the period 2005–2021 to examine the prevalence, drivers and implications of insolvent companies that remain in operation. The EMEs in question are China, Hong Kong, India, Indonesia, Malaysia, the Philippines
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