Entries for 'Debt'

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.

Credit growth in China reached $5 trillion in 2020, up over 35%yoy—faster than nominal GDP growth; Corporate defaults have risen sharply in recent years, reaching $14bn in 2020 despite relief in Q2/Q3 from forbearance; China’s general gov’t debt at 45% of GDP is well below the global average—but adding local gov’t debt brings it to 92%; China’s overseas investment and lending has slowed in recent years, dropping sharply in 2020 amid the pandemic

EM corporates have racked up $4 trillion in FX debt since 2007, bringing total FX exposure to $7 trillion; More in store:  current USD weakness—with no Fed rate hike seen pre-2025—sets the stage for continued buildup in FX debt; EM corporate eurobond issuance reached $380 billion in 2020, up 10% from 2019; a record 95% of that was in USD; Most of this issuance was driven by non-financial corporates ($220bn), especially in China ($68 billion)

As the mountain of negative-yielding debt hits new record highs, EM sovereigns continue to benefit from the search for yield ; Emerging markets set to rely increasingly on USD borrowing as abundant global central bank liquidity persists; China has significantly cut back its lending to low-income countries

We have added new enhancements to our debt tracking framework for mature markets, improving the comparability of our debt estimates—especially during periods of large swings in GDP, as has been the case during the COVID-19 pandemic; Using this method, global debt is estimated to reach nearly $275 trillion in Q3 2020—some $2.5 trillion higher than our previous estimate

Global debt has surged by over $15 trillion since 2019, hitting a new record of over $272 trillion in Q3 2020. As the fiscal response to the pandemic continues, we expect global debt to hit $277 trillion (365% of GDP) by end-2020

DSSI-eligible SSA countries have not tapped capital markets during the pandemic. However, roughly half of these countries have continued to attract net banking inflows. Large revenue losses have brought the government debt-to-revenue ratio to a staggering 480% in 2020.

COVID-19 highlights the need for structural reform in emerging market sovereign debt financing—and makes it more urgent. High, procyclical funding costs—coupled with lower trend growth—make it difficult to find fiscal space to support sustainable recovery.  Failure to deal with this challenge today could result in much higher future costs for the global economy.