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Real Emerging Market Subnational Borrowing Is Set To Ebb In 2023 Despite Elevated Chinese And Indian Debt, Report Says


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Real Emerging Market Subnational Borrowing Is Set To Ebb In 2023 Despite Elevated Chinese And Indian Debt, Report Says

AUSTIN (S&P Global Ratings) March 6, 2023--S&P Global Ratings expects emerging market (EM) local and regional governments' (LRGs') borrowing to recede from a 2021 peak in 2023-2024, falling to nearly $1.2 trillion in 2024, according to "Subnational Debt 2023: Real Emerging Market Borrowing Is Set To Ebb Despite Elevated Chinese And Indian Debt," published today. China and India will contribute 98% of EM borrowing in 2023 and 2024, primarily to finance infrastructure spending, and throughout other EMs, gross borrowing will decline from an already low base.

"Lower net borrowing and inflation dynamics will keep debt burdens broadly stable among EM LRGs, with the notable exception of India," said S&P Global Ratings credit analyst Sarah Sullivant.

S&P Global Ratings expects nearly half of total subnational debt in 2023 and 2024 will be from EMs, particularly China and India, and that this share will continue to grow even as borrowing slows throughout EMs. Still, the outsize pace of borrowing in these two countries masks significant--and in some cases, mounting--barriers to debt markets for many EM LRGs, even as infrastructure needs persist.

This report does not constitute a rating action.

The report is available to subscribers of RatingsDirect at If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to Ratings information can also be found on S&P Global Ratings' public website by using the Ratings search box located in the left column at Members of the media may request a copy of this report by contacting the media representative provided.

Primary Credit Analysts:Sarah Sullivant, Austin + 1 (415) 371 5051;
Noa Fux, London 44 2071 760730;
Felix Ejgel, London + 44 20 7176 6780;
Susan Chu, Hong Kong (852) 2912-3055;
Media Contact:Jeff Sexton, New York + 1 (212) 438 3448;

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