The macroeconomic implications of the ongoing military conflict between Russia and Ukraine will add to fiscal challenges for many sovereigns in 2022. Even before the conflict, our projections suggested that sovereign borrowing would not return to pre-pandemic levels any time soon. Rising interest rates will further complicate the fiscal and funding outlooks.
In our lead article, “Sovereign Debt 2022: Borrowings Will Stay High On Pandemic And Geopolitical Tensions,” we highlight that sovereign commercial borrowing will stay high in 2022 not least due to fiscal challenges presented by the pandemic and high inflation, but also the global repercussions of the Russia-Ukraine conflict, including higher energy and food prices. The latter will put upward pressure on government borrowing needs, especially in Europe where growth and revenues will likely be weaker this year and governments will spend more on energy subsidies, hosting refugees and defense.
In addition, in this publication we include regional reports on the Americas, APAC, developed Europe, and emerging EMEA, in which we discuss how we expect the above factors will affect sovereign borrowing outlooks in these regions this year.
Finally, this year we are issuing our Sovereign Borrowing Report in a new and interactive platform that we hope you will enjoy. We welcome your feedback on possible enhancements for future years.
Regards,
Roberto H. Sifon Arevalo
Chief Analytical Officer
Sovereign and IPF Ratings
S&P Global Ratings
