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Tuesday, 28 February 2017

S&P expects global sovereign debt to jump to a record high of USD 44 tn in 2017

Global sovereign debt is expected to jump to a record high of USD 44 tn in 2017, according to a report by Standards & Poor’s which came out over the weekend (watch, runtime: 2:09). Absolute debt will rise almost USD 1 tn, up 2.5% year-on-year, despite a slight reduction in annual government borrowing. The US and Japan will be the “most prolific borrowers" in 2017, accounting for 60% of total borrowing, followed by China, Italy and France. S&P forecasts that gross borrowing from commercial sources in 2017 will increase to USD 1.1 tn in 20 major emerging market countries, with Brazil and India coming in second and third after China.

Egypt will again face the highest debt rollover ratio (including short-term debt), reaching29% of GDP. The country has an “unusual dependence” on short-term debt, which accounts for 34% of total debt, S&P say. MENA region sovereign borrowing will decline 20% this year to USD 136 bn, after increasing sharply in 2016, on the back of fiscal consolidation implemented by the GCC.

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