Fitch: 9 different countries have defaulted 14 times since the pandemic

The international credit rating agency Fitch Ratings announced in a report that there have been 14 different default events in 9 different countries since 2020, which is a record level.

The report indicated that between 2000 and 2019 there were a total of 19 breaches in 13 different countries. Notably, the number of defaults after 2020 was extremely high.

By stating that 5 of the countries it has given a credit rating are in default, Fitch claims that; He listed them as Belarus, Lebanon, Ghana, Sri Lanka, and Zambia.

MANY COUNTRIES HAVE LOW CREDIT RATINGS

In addition, Fitch announced that it has rated 8 states ‘CCC+’ or lower, while 9 states have been rated ‘B-‘. For countries rated ‘C’ to ‘CCC+’ by Fitch, the default rate between 1995 and 2021 was 40.6.

Fitc’s ‘C’ level is “well below investment grade category. It is in danger and to meet its financial obligations, the economic, sectoral and financial conditions must evolve positively”. Level B also carries high risks.

Fitch also announced that, given the government bonds it has rated, the government debt-to-GDP ratio has risen steadily from 31% in 2008 to 48% before the Covid-19 outbreak. China’s loan facilitation was effective in this.

WAR, EPIDEMIC, INFLATION AND INTEREST EFFECT

According to the Fitch report, factors such as the epidemic, rising food and energy prices due to the Russia-Ukraine war, global inflation, and the sudden tightening of monetary policy negatively affected at-risk markets.

The report referred to the Common Debt Framework, launched by the G20 during the pandemic, to help heavily indebted countries find a way to restructure their debt.

It was said that this program is intended to facilitate creditor coordination, but so far it has not been effective in resolving crises quickly. The reports indicated that the main reason for the delays was a lack of coordination between Chinese stakeholders.