- April 1, 2017: Vol. 29, Number 4

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Sovereign debt and ratings trends

by Jennifer Molloy

The United States (31 percent) and Japan (29 percent) are anticipated to account for 60 percent of the expected $6.8 trillion in borrowing by sovereign nations worldwide in 2017, followed by China (5 percent), Italy (4 percent) and France (3 percent), according to Standard & Poor’s Global Ratings. This dollar amount is a projected 4 percent ($315 billion) decline from 2016 in gross long-term commercial borrowing, in part because of fiscal consolidation; however, the reduction in borrowing primarily stems from exchange-rate movements.

In addition, sovereign debt levels continue to increase on an absolute basis.

“We project that total outstanding global sovereign commercial debt stock will rise during 2017 by almost $1 trillion to reach an all-time high of $44 trillion by the end of this year — up by 2.3 percent, at projected market exchange rates,” notes S&P Global Ratings.

Sovereign ratings in general continue to trend downward, with negative out

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