Economists in the Media | Maturity Wall Looms Higher | USPF 2024 Outlook | LATAM Pension Reform | Sustainability Trends Webinar

Welcome to the latest edition of Essential Economics! This week, we kick off with our senior team in the media: Asia-Pacific Chief Economist Louis Kuijs appeared on Bloomberg Markets Asia to discuss the prospects for deflation in China, US Chief Economist Satyam Panday appeared on Asset TV to discuss his latest US business cycle barometer, and I joined the 21st Century Business Herald at the NYSE to talk about my Davos takeaways and the timing of Fed rate cuts. Credit Researcher Evan Gunter and team report on the looming maturity wall, noting that global debt maturities will rise from nearly $2 trillion in 2024 to a peak of $2.8 trillion in 2026. Robin Prunty, Eden Perry and the US Public Finance team issued their outlook for 2024, arguing that although recession risk has moderated, higher interest rates and inflation, coupled with expected slower economic growth, will create headwinds from a credit perspective. Ratings Analysts Constanza Perez-Aquino and Nicole Schmidt write that demographics and increased social demands in Latin America have sparked pension reform discussions, compelling governments to address many competing objectives in a balanced way. Finally, we tee up a webinar next Thursday on key 2024 sustainability trends.

Economists in the Media: Kuijs, Panday, Gruenwald

Our senior team was out in the media this past week. Louis appeared on Bloomberg Markets Asia to discuss his recent work on the prospects for deflation in China. Satyam appeared on Asset TV to discuss the findings of the US Business Cycle Barometer. I joined Chinese outlet 21st Century Business Herald at the NYSE to talk about the Fed’s expected policy rate path and US growth prospects.

To watch Louis’ interview on Blomberg, click here.

To watch Satyam’s interview on Asset TV, click here.

To watch my interview with 21st Century Business Herald, click here.

Global Refinancing: Maturity Wall Looms Higher

Evan and team write that global debt maturities will rise from nearly $2 trillion in 2024 to a peak of $2.8 trillion in 2026. Speculative-grade credits account for a growing share, rising more than four-fold between 2024 and 2028, reaching $1.1 trillion. This is a level that combined leveraged loan and speculative-grade bond issuance has only exceeded in three of the past 10 years.

The greatest refinancing risk likely sits with the lowest-rated debt.

To read the full document, click here.

US Public Finance Outlook 2024: Mixed Picture

Robin and team expect credit stability across most of U.S. public finance in 2024. Some sectors are facing credit pressure and their challenges are detailed in our 2024 sector outlook publications. Recession risk has moderated but higher interest rates and inflation, coupled with expected slower economic growth, will create headwinds from a credit perspective.

Proactive management and governance are key to credit stability, given the broad range of risks facing governments and not-for-profit entities.

To read the full report, click here. ?

To explore the interactive version of the report, click here.

Pension Reforms in LATAM: Balancing Act

Constanza and Nicole argue that aging demographics and increased social demands in Latin America have sparked pension reform discussions, compelling governments to address many competing objectives in a balanced way. Anemic, uneven economic growth and low contribution rates, among other factors, have led to insufficient retirement savings for a significant share of beneficiaries.

Most of the proposed reforms will likely be neutral or positive for sovereign ratings.

To read the full report, click here.

Coming Soon: Key 2024 Sustainability Trends Webinar

Please join us for a live webinar on February 15 where senior analysts discuss the credit ratings perspective on some of our?key sustainability trends we’re watching in 2024.? Topics include: how climate adaptation can support credit ratings stability when entities face acute and chronic physical risks, what a global plastics ban could mean for corporate issuers in the chemical and retail sectors and the difficulty of managing and reporting disruption risks within the supply chain.

The panel will be moderated by Gregg-Lemos Stein, Chief Analytical Officer for corporates.

To register for this complimentary webinar, click here.