Sovereign debt issuance trends in emerging market economies

Emerging market and developing economies (EMDEs) have been steadily increasing their borrowing from the markets following a long period of low interest rates and high levels of global liquidity since the 2008 global financial crisis. The debt levels of EMDE sovereigns reached record highs during the COVID-19 pandemic and have not yet returned to pre-pandemic levels. Against this backdrop, macro-financial conditions worsened in 2022 due to soaring inflation, monetary tightening, geopolitical uncertainties and a deteriorating growth outlook. Increasing capital outflows led to a depreciation of EMDE currencies against the US dollar, exacerbating external debt burdens. With further deteriorations in sovereign credit ratings in 2022 and substantial debt due in the coming years, many EMDEs continue to face significant financing risks. This chapter presents an overview of sovereign bond issuance trends in EMDEs in 2022. […]