LONDON (Reuters) - The amount of debt owed by the world’s governments will jump to a record $53 trillion (41.1 trillion pounds) by the end of the year, S&P Global estimated on Thursday, with $8.1 trillion set to borrowed this year alone.
About 70%, or $5.8 trillion, of sovereigns’ gross borrowing will be to refinance maturing long-term debt, though the expected $2.3 trillion of new borrowing will still be worth at least 2.6% of global GDP.
S&P said the increase reflected the higher borrowing needs of the largest countries. The U.S. at $3 trillion and Japan at $1.75 trillion will remain by far the largest borrowers globally, accounting for almost 60% of the overall total.
“By end-2020 we project that the commercial debt stock of all sovereigns we rate will rise by 5% to reach a record of $53 trillion compared to 2019 and by 30% compared to 2015,” a report headed by analysts Karen Vartapetov and Roberto Sifon-Arevalo said.
After the U.S. and Japan, China is forecast to issue around $636 billion, followed by Italy, Brazil, and France, each of which are expected to borrow $250 billion in 2020.
Those four together will account for around 17% of the global total, slightly below Japan by itself, while the G-7 group of nations will account for approximately 70% of global borrowing and debt.
The top 20 emerging economies are expected to issue a combined $1.62 trillion this year meanwhile, with up 4% from 2019 and a historical high.
“The (global) increase reflects the higher borrowing needs of the largest sovereign issuers as their fiscal stance loosens in 2020 amid the fragile global economic outlook,” the report said, adding that low interest rates were also encouraging the trend.
Reporting by Marc Jones; Editing by Christina Fincher
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