articles Ratings /ratings/en/research/articles/230306-real-emerging-market-subnational-borrowing-is-set-to-ebb-in-2023-despite-elevated-chinese-and-indian-debt-re-12659217 content esgSubNav
In This List
NEWS

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

COMMENTS

Cyber Risk Insights: European Banks' IT Complexity Amplifies Risk

COMMENTS

Credit FAQ: Why Brazilian Digital Banks Aren't Exposed To The Same Risks As SVB

COMMENTS

Instant Insights: Key Takeaways From Our Research

COMMENTS

European Bank AT1 Hybrids In A Post-Credit Suisse World


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 www.capitaliq.com. 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 research_request@spglobal.com. 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 www.standardandpoors.com. 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;
sarah.sullivant@spglobal.com
Noa Fux, London 44 2071 760730;
noa.fux@spglobal.com
Felix Ejgel, London + 44 20 7176 6780;
felix.ejgel@spglobal.com
Susan Chu, Hong Kong (852) 2912-3055;
susan.chu@spglobal.com
Media Contact:Jeff Sexton, New York + 1 (212) 438 3448;
jeff.sexton@spglobal.com

No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.


Register with S&P Global Ratings

Register now to access exclusive content, events, tools, and more.

Go Back