Singapore, March 2 (ANI): SP Global Ratings on Tuesday projected that Asia Pacific central government borrowings will remain high by historical standards in 2021 after a pandemic-driven surge in 2020.

Long-term commercial borrowing for the region is likely to be 4.1 trillion dollars this year after reaching a record 4.6 trillion dollars in 2020, it said in a report.

Although it is a reduction from last year, sovereign commercial borrowing in 2021 will still be well above the sub-3 trillion dollar annual levels recorded in the few years leading up to 2019. "We expect reduced issuances out of China and Japan to account for the bulk of decline."Although the fighting against Covid-19 continues, its burden on government finances is likely to be lower. For one, vaccines being rolled out in many countries should allow governments to rein in the disease and lower the infection rates globally sometime this year.

In addition, having had about a year of experience dealing with the pandemic, most governments are better poised to limit the brunt of containment measures on their finances.

"We estimate that 70 per cent or 2.9 trillion dollars of the sovereigns' gross long-term commercial borrowings will be used to refinance maturing debt," said SP Global Ratings credit analyst KimEng Tan.

Net long-term commercial borrowings are projected at about 1.2 trillion dollars this year. This is a little over half of the amount in 2020 but well above the 500 billion to 833 billion dollars annually in 2016-2019.

The projected issuance this year will bring the Asia Pacific sovereign commercial debt stock to an equivalent of 22 trillion dollars by the end of 2021, up by 1.4 trillion dollars from 2020.

"If we include bilateral and multilateral debt, the total stock in 2021 will reach 22.4 trillion dollars, about 1.4 trillion dollars above that in 2020. (ANI)