Some oil producing countries face alarming fiscal situation, researcher says

Back then, crude oil producers that avoided sovereign defaults "were the exception rather than the rule", Gabriel Sterne, Oxford Economics's Head of Global Macro Research said in a research note sent to clients.

"Markets are currently pricing in 2-3 notch downgrades for major EM oil and commodity producers. It will end up worse than that unless prices rebound quickly," Sterne said.

Most national budgets in oil producing countries were based on an oil price assumption for 2016 which on average lay 54% above current market pricing.

Making matters worse, fiscal buffers in those same countries had already been weakened - with public debt-to-gross domestic product ratios already north of 40% at the beginning of the downturn and poor governance in some of those same countries might delay the necessary adjustments, the economist added.

According to Oxford Economics´s models, markets were already pricing in sovereign credit downgrades of between two to three notches, but "it could end up worse", he said.

On a more positive note, interest rates around the world would likely rise more slowly than in the 80s - when yields on long-term US Treasury note hit a peak at 15%, for example.

However, the fact that public debt in emerging markets was now more often denominated in local currency meant there was a bigger incentive to inflate away its value in real terms, although it also entailed a smaller temptation to defaul.