SINGAPORE, March 10 — Asia-Pacific central governments will continue to borrow heavily this year although new borrowings may decline, according to S&P Global Ratings.
The credit rating agency said new borrowings may decline from the record level in 2022 due to easing budgetary pressures as pandemic-related spending fades.
It said this in its report titled “Sovereign Debt 2023: Asia Pacific Central Government Borrowing To Fall Below US$4 Trillion”, released today.
Its credit analyst Kim Eng Tan said much of the decline would be due to smaller 2023 issuances out of Japan.
“Governments of other major Asia-Pacific economies, including Australia, China, India, and Korea, are likely to also borrow less this year,” he added.
The analyst noted that the decline in borrowing could have been sharper.
However, he said the need to provide support for households and businesses in the face of strong inflation and higher interest rates limits the scope for fiscal consolidation.
“Consequently, borrowing this year is still well above the sub-US$3 trillion levels of pre-pandemic years.
“We project Asia-Pacific commercial government debt will increase by almost US$1 trillion, resulting in a year-end total of US$19.2 trillion,” he said.
The report is available to subscribers of RatingsDirect at www.capitaliq.com.
— Bernama
