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Entries for 'Debt'

Green Weekly Insight: Signs of Recovery in ESG Markets

While flows to ESG funds fell for the second consecutive quarter in Q2 2022, they remain in positive territory year to date—in sharp contrast to large outflows from conventional funds; Moreover, recent weeks have seen indications of a robust pickup in investor appetite for ESG-aligned debt and equity; ESG debt issuance reached $330 billion in Q2 2022, up from $315 billion in Q1, helped by surging issuance in China; In contrast, total issuance in voluntary carbon offset markets continued to decline in Q2 2022, with most of the volume coming from India, the U.S. and China.

Written evidence submitted by the Institute of International Finance for the House of Commons International Development Committee’s Inquiry on Debt Relief in Low-Income Countries

The Institute of International Finance welcomes the opportunity to respond to the House of Commons International Development Committee’s inquiry on debt relief in low-income countries. We commend the Parliament for taking this step in investigating this important issue.

Weekly Insight: Triple Threat: Debt, Climate, and Inequality

Climate-vulnerable low- and lower-middle income countries (LLMICs) have much lower “debt tolerance” (ability to manage high levels of debt...

Weekly Insight: Climate collaboration in a polarized world

Mounting geopolitical tensions risk undermining the international collaboration needed to address global challenges, including efforts to scale up climate finance; Yet delays to climate policies may prove costlier than swift action—which would further exacerbate public debt burdens; Near-term sovereign debt vulnerabilities in major emerging markets have increased substantially this year, but less so than in 2020; these growing debt strains make the challenge of sourcing climate finance more difficult still.

Weekly Insight: Rising rates, stronger USD spell trouble for EMs

Rising borrowing costs and the strength of the USD will exacerbate debt vulnerabilities in emerging markets; With EM budget deficits still running above pre-pandemic levels, higher and more volatile energy prices could force some countries to increase public spending even further; Effective investor relations (IR) programs can play a vital role during times of diminishing market confidence to mitigate contagion by providing investors with a better understanding of policy goals; However, successful IR practices require timely dissemination of relevant information beyond central government debt obligations and fiscal operations. Countries still need to provide more data on ESG priorities and progress.

Global Debt Monitor: Debt in the Time of Geopolitics

Total global debt rose by $3.3 trillion in Q1 2022 to a new record of over $305 trillion—mostly due to China and the U.S. 

Weekly Insight: Growing risks in corporate debt markets

Across the mature and emerging markets that we cover in our Global Debt Monitor, non-financial corporate debt is at record high of near $90 trillion—over $12.5 trillion higher than pre-Covid levels; Emerging markets recorded more than half of this buildup in non-financial corporate debt—an increase of some $7.5 trillion since 2019. Of note, Chinese corporates have stepped up borrowing even more in 2022; With the Ukraine-Russia war disrupting the global economic recovery, corporate valuations have come under pressure as global funding conditions tighten rapidly; Fully one-third of small-sized firms in mature markets are already having difficulty covering interest expenses.

IIF Weekly Insight: Prevention and Resolution of Sovereign Debt Crises – the Importance of Market-based Approaches

The rapid buildup in sovereign debt levels over the past 15 years has greatly increased the risk of further debt strains—especially in highly-indebted developing countries—as global rates climb; higher food and energy prices also hurt; Timely sovereign debt workouts are a challenge: studies suggest that official creditors are slower to coordinate in resolving arrears than private creditors—concerning, as a large portion of low-income countries’ debt is owed to official creditors; The updated Principles for Stable Capital Flows and Fair Debt Restructuring offer an effective framework for debt crisis prevention and resolution, highlighting the best market-based practices to promote sustained market access.

ESG Flows and Markets - Q1 2022 Chartbook

We are pleased to share our new quarterly chartbook, designed to monitor sustainable flows (to ESG funds, climate finance flows, and climate finance to emerging markets), ESG market development, and the evolution of voluntary carbon markets.  We also include our regular EM ESG Scorecard—a useful indicator of progress in areas including carbon efficiency as well as broader environmental and social issues.

Frontier Market Debt Monitor: Juggling act—debt, inflation, and growth

Total debt in frontier markets surged to a new record high of $3.5 trillion in 2021—some $500 billion above pre-pandemic levels. However, after reaching an all-time high in 2020, FM debt declined to 108% of GDP in 2021—helped by recovery and inflation. 

 

 

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