Dear readers,
This year we present our regular annual series of subnational borrowing reports amid the ongoing military conflict between Russia and Ukraine, which is contributing to a global economic slowdown and higher inflation, especially in Europe and North America. This is creating new fiscal challenges for many local and regional governments, which had been largely on track for more balanced budgetary performance in a post-pandemic economic recovery.
In our lead article, we present our global forecast for subnational borrowings and debt burdens in 2022-2023. We estimate that annual borrowing will stay elevated and that debt outstanding will exceed $16 trillion by 2023—40% higher than before the pandemic. In the following two reports we describe borrowing trends specific to developed and emerging markets. Although we expect local and regional governments in developed markets to reduce borrowings overall, they will nevertheless stay high amid ongoing fiscal consolidation efforts—and the military conflict could suspend this downward trend. In emerging markets, subnational borrowing in China will stay largely flat due to rising refinancing needs, while new borrowings in other emerging markets will remain subdued. Our fourth regional report covers the borrowing plans of the top-15 bond issuers among local and regional governments outside the U.S. Finally, we also include five reports on subnational borrowings in Australia, Canada, China, France, and German-speaking Europe.
This year we are issuing our borrowing reports on local and regional governments on a new and interactive platform that we hope you will enjoy.
We welcome your feedback on possible enhancements for future years.
Best regards,
Felix Ejgel
Senior Director, Sector Lead
Sovereign and IPF Ratings
