In 2023, frontier market (FM) accumulated some $20 billion of new debt, bringing the total to $3.5 trillion. For the first time since 2020, the FM debt-to-GDP ratio increased, as growth and inflation subsided.
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.
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.
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.
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.
The growing links between financial leverage and non-financial risks (e.g. climate) are complex and will require new data tools and metrics to monitor and address.
With higher interest rates weighing on issuance, global debt edged lower again in Q3 2022, to some $290 trillion.
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.
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.
In light of the 2021 Spring Meetings of the World Bank Group and International Monetary Fund, this letter provides private sector views that build on our November 2020 letter to the G20.
This Addendum references the recent extension of and modifications to the G20/Paris Club Debt Service Suspension Initiative through June 30, 2021, providing a similar extension of/modifications to the private sector Terms of Reference.
In the wake of the extension of the G20 Debt Service Suspension Initiative (DSSI), as well as recent thoughtful proposals for reforming the international sovereign debt architecture, the IIF offers these private sector perspectives that build on our September 22 letter to the G20.
We remain strongly supportive of the intent behind the DSSI. However, we also recognize that the underlying premise may have changed-the issues in some countries are no longer temporary liquidity problems, but rather more fundamental solvency concerns. This letter sets out three key points which we believe are crucial.
Informed by our working group discussions, this letter is meant to frame the accompanying Terms of Reference for private sector consideration of borrower requests within the DSSI.
The Terms of Reference are a toolkit for DSSI-eligible sovereign borrowers that request forbearance from their private creditors. This new framework offers a flexible template for in-scope borrowers and their private creditors to advance conversations and enable voluntary debt service suspension, on terms in line with official bilateral creditors.
A new set of private sector principles to enhance transparency in sovereign debt markets.
We are pleased to invite comments and suggestions on the latest draft of the voluntary Principles for Debt Transparency.? Feedback is welcomed from all stakeholders, including private sector financial firms; official sector bodies including international organizations, finance ministries and debt management offices; and civil society.