Entries for 'Debt'

Some $10 trillion was added to the global debt mountain last year, bringing the total to a new record high of $303 trillion.

Emerging markets are entering the 2022 Fed rate cycle with much higher debt: government debt is up over 20% since 2019; Of concern: heightened political and social pressures could hinder efforts to bring down budget deficits, expected to remain above pre-pandemic levels in 2022/23. Looming elections in Brazil, Colombia, and Philippines could add to the pressure; Watch the high-yield space: while investment grade Eurobond issuance has been strong, high-yield has faltered this year; Among major EMs, Turkey, China, Indonesia, and Saudi Arabia have the largest borrowing needs in Eurobond markets.

Debt investors seek more ESG issuance from emerging markets as the financial materiality of ESG becomes increasingly clear; Sovereign ESG scoring is no easy task—dozens of indicators and differing approaches across providers cloud the picture; Ingrained income bias: sovereign ESG scores are highly correlated with income per capita, which could deter flows to EMDEs; Solutions to income bias include “inclusive wealth accounting" and adjusting ESG scores for a country’s level of development.

Economic recovery remains uneven and patchy for low and lower-middle income countries (LLMICs); Despite easing external debt strains, more than half of LLMICs are at high risk of—or already in—debt distress; Little information to date on how the G20 Common Framework is being implemented; Greater debt transparency could galvanize ESG investments in emerging and developing economies—a key COP26 theme.

Some $4.8 trillion was added to the global debt mountain in Q2 2021, bringing it to an all-time high of $296 trillion. Better news: the global debt/GDP ratio declined significantly in Q2 2021, though this follows a large spike in 2020.

Efforts to improve debt transparency are underway in both the private and public sectors; the IMF and World Bank, for example, provide technical assis...

Good investor relations practices call for better debt transparency that supports regular, meaningful debtor-creditor dialogue; Limited access to timely, accurate and clear data can hinder capital flows to developing countries, while improvements in debt transparency are associated with lower borrowing costs and higher sovereign credit ratings; In cases of default, fair debt restructuring requires active information-sharing between debtor and creditors.

High and rising sovereign debt levels have greatly increased the likelihood of further debt strains; Better sovereign debt crisis prevention and resolution is needed to reflect fundamental market changes in recent years; We believe that efforts to strengthen existing mechanisms should center on improving debt transparency, regular and meaningful private-public sector dialogue, and integrating ESG/SDG considerations—all will help borrowers’ market access.

Transparency around sovereign debt obligations remains limited, particularly for emerging and developing economies; International financial institutions could help by making more granular debt data available to the public; Greater clarity around the process, terms and conditions of sovereign debt restructuring would also support debt transparency.

Total global debt fell by $1.7 trillion to $289 trillion ($221 trillion ex-financials) in Q1 2021–nearly all in mature markets

This Second Addendum references the recent extension of and modifications to the G20/Paris Club Debt Service Suspension Initiative through December 31, 2021, providing a similar extension of/modifications to the private sector Terms of Reference.

Government debt levels in emerging markets are rising rapidly as pandemic and SDG-related spending needs ramp up; Prioritizing growth-boosting green investments could help offset the anticipated surge in debt ratios; The good news: near-term sovereign debt vulnerabilities in major emerging markets have eased back to pre-pandemic levels

Total debt in frontier markets (FM) reached a record high of nearly 110% of GDP in 2020, up from less than 100% in 2019. We have added 15 new countries to our FM debt database.

Pandemic response helped add $24 trillion to the global debt mountain in 2020, bringing it to a new high of $281 trillion.