Entries for 'Debt'

Global debt reached a staggering $307 trillion in Q3 2023, with a big increase across the board in both mature markets (U.S., Japan, France, and the UK) and emerging markets (China, India, Brazil, and Mexico).

The ESG debt universe has expanded by $1.1 trillion over the past four quarters, surpassing $5.6 trillion in Q3 2023.

Rising global tensions and political divides could hinder multilateral efforts to achieve sustainable development goals. Global economic performance remains subdued, with significant regional disparities; a contributing factor has been the prolonged stagnation in global capital flows over the past 15 years amid post-financial crisis regulatory initiatives.

After reaching an all-time high of $3.5 trillion in Q1 2023, total debt in frontier markets (FM) saw a slight decline in Q2 2023.

Sovereign debt vulnerabilities in emerging markets and developing economies—already worrying—are expected to intensify in the face of higher borrowing costs.

In a higher-rate environment, the global debt stock rose by $10 trillion to a new record high of $307 trillion in H1 2023. 

Over the past 15 years, EM government debt levels have soared, with domestic debt accounting for much of the increase. Debt issued under foreign law now constitutes only about 10% of total borrowing by EM governments.

Emerging market sovereign borrowers have raised some $85 billion from international debt markets to date this year, up from over $60 billion during the same period last year. However, this pace is still significantly weaker than it was pre-pandemic ($150 billion per year on average from 2016-2019).

Global climate flows surpassed $1.1 trillion in 2022 - up over 25% from $870 billion in 2021. However, this is still well short of what will be needed to achieve net-zero emissions. ESG stock and bond market performance improved in Q2 2023. Despite rapid growth, ESG integration in global debt markets is still at an early stage: just 6.1% of total debt issuance in Q2 2023 was ESG-linked.

The ESG debt universe (bonds and loans) hit a fresh record high of $5.4 trillion in H1 2023, up 30% from H1 2022. However new ESG debt issuance slowed to some $630 billion in H1 2023—over 15% lower than in H1 2022.

High and rising global debt levels have created a slow-burning crisis, with countries increasingly vulnerable to future shocks after the unprecedented surge in government debt resulting from the Covid-19 pandemic.

The global debt stock grew by $8.3 trillion to a near-record $305 trillion in Q1 2023; the combination of high debt levels and rising interest rates has pushed up debt service costs, prompting concerns about the use of leverage in the financial system.

Amid tighter monetary and financial market conditions, ESG fund flows remain subdued and volatile. After large outflows in March, April saw a slight recovery in investor appetite for ESG funds. However, outflows from emerging market ESG funds accelerated in April.

The ESG debt universe hit $5.1 trillion in Q1 2023, up from $3.8 trillion a year ago and $2.3 trillion in Q1 2021. Amid the recent banking sector turmoil, ESG loan issuance fell sharply in Q1 2023, coming in at $40 billion—over 65% lower than in Q4 2022. In contrast, ESG bond issuance reached its highest level in five quarters.

Some $120 billion was added to the debt pile of frontier markets in 2022, bringing it to an all-time high of $3.6 trillion.

The nominal USD value of global debt declined by some $4 trillion to slightly below $300 trillion in 2022. Helped by stronger growth and inflation, global debt/GDP fell again in 2022 – but is still above pre-pandemic levels.