Azernews.Az

By Bloomberg

Standard & Poor’s sees the 21 Asia-Pacific sovereigns it rates borrowing $2.6 trillion from long-term commercial sources this year, with China accounting for a larger proportion of the total outstanding as it adds stimulus.

Total stock of such debt by those governments will rise 4.7 percent to $16.5 trillion in 2015, S&P analysts led by Kim Eng Tan wrote in a report dated Thursday. A predicted decline in borrowing by Japan and Australia will offset increases elsewhere, it said.

“It’s relatively small growth as the region was coming out of a recovery in the past few years, so fiscal deficits were wide and borrowing needs were larger,” Tan said by phone Friday. “We’re now seeing that start to diminish.”

China will see its share of outstanding debt increase after the government widened the fiscal-deficit target and estimated 2015 economic growth at 7 percent, the least in 15 years. The nation will account for 12.7 percent of the region’s total borrowing, from 10.5 percent in 2014, the note said.

“China has indicated that it’s likely to adopt a more proactive policy this year, especially as investment is likely to be less of a significant force in terms of boosting growth,” Tan said.

Japan will remain the largest debtor in Asia Pacific with 70 percent of the region’s outstanding obligations and 63 percent of new debt at end-2015, even as the government is likely to reduce borrowing this year, the report said. The nation plans to increase the average maturity of its bond sales to nine years in 2015, six months longer than in the previous period, according to the report.

The company’s estimates focus on offerings by governments and excludes local authorities, social-security funds, sovereign-backed obligations and debt issued by central banks for monetary policy purposes.