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Global bond sales to surpass $10 trillion by 2022 -S&P According to Reuters


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© Reuters. FILE PHOTO: The logo of S&P Global is displayed above the company’s offices in the financial district in New York City, U.S., December 13, 2018. REUTERS / Brendan McDermid

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LONDON (Reuters) – Global sovereign lending will hit $10.4 trillion by 2022, nearly a third higher than the pre-coronavirus pandemic average, S&P Global (NYSE:) Ratings said. in a report.

Despite the economic recovery, borrowing will continue to soar due to high debt settlement requirements and the war in Ukraine, the rating agency said in an annual note.

While 137 countries will borrow the equivalent of $10.4 trillion in 2022, an estimated 30% lower than in 2020, the overall figure is more than a third higher than the average borrowing from 2016 through 2019, S&P said.

“Tightening monetary conditions will push up government funding costs,” S&P analysts said.

“This will make it more difficult for countries that have been unable to restart growth, reduce reliance on foreign currency financing, and where interest bills are already very high on average.”

S&P said borrowing in emerging economies Europe, the Middle East and Africa (EMEA) will grow by $253 billion to $3.4 trillion by the end of the year.

S&P analysts forecast that Egypt, which recently sought IMF support, will overtake Turkey as the largest sovereign debt issuer in the region, with sales sold bonds worth $73 billion.

Among the larger nations globally, Kenya, Egypt and Japan have the largest share of debt that needs to be turned around this year, analysts say. .

Trade debt in emerging markets EMEA is expected to grow to 37% of GDP from 31% in 2016, fueled by pandemic-related costs, an increase in commercial borrowing in Oman and Saudi Arabia and “persistently high fiscal deficits” in Egypt and Romania.

Across emerging markets, JPMorgan (NYSE:) analysts said in a note Monday, corporate default rates could hit 8.5% this year, more than double compared with the 3.9% they expected before Russia invaded Ukraine and the highest since the global financial crisis.

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