1 August 2023
Sovereign debt defaults increased by 35% to $558 billion in 2022 as interest rates rose, hitting emerging markets and heavily indebted poor countries hardest, says a Bank of Canada and Bank of England report. Even though the number of countries in default reduced from 99 to 84, the amount of default debt expanded significantly, with the largest increases in poorer countries and emerging markets. This comes as global government debt remains high amid rising interest rates, and the IMF anticipates the global public debt will continue to increase over the medium-term.