Fitch Ratings says Sovereign defaults are at a record high

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Via a report from Fitch, in brief:

A record five Fitch-rated sovereigns are in default:

• Belarus, Lebanon, Ghana, Sri Lanka and Zambia.

There have been 14 separate default events since 2020, across nine different sovereigns

• Argentina, Ecuador, Suriname and Ukraine as well as those currently in default

compared with 19 defaults across 13 different countries between 2000 and 2019.

Fitch adds this:

• Further Defaults Likely

Fitch cites sovereign borrowing costs ramping higher.

• Median general government debt-to-GDP ratio climbing to 48% pre-Covid from 31% in 2008, helped by easier access to the eurobond market and financing from China.
• “Against this backdrop, frontier markets with limited buffers were poorly placed to cope with the severe shocks from the pandemic and the impact of Russia’s invasion of Ukraine on food and energy prices, global inflation and the subsequent abrupt tightening in monetary policy”