BoC–BoE Sovereign Default Database: What’s new in 2024?

Introduction

Since 2014, the Bank of Canada (BoC) has maintained a comprehensive database of sovereign defaults to systematically measure and aggregate the nominal value of the different types of sovereign government debt in default.1 The database draws on published datasets compiled by various public and private sector sources. It combines elements of these sources with new information to develop comprehensive estimates of stocks of government obligations in default. These include bonds and other marketable securities, as well as bank loans and official loans, valued in US dollars, for the years 1960 to 2023, on both a country-by-country and a global basis.

The database is posted on the BoC’s website and is updated annually in partnership with the Bank of England (BoE). Regular updates of the BoC–BoE database are useful to researchers analyzing the economic and financial effects of individual sovereign defaults and, importantly, the impacts on global financial stability from episodes involving multiple sovereign defaults.

In this paper, we:

• highlight developments in sovereign debt defaults in 2023, including details on the 1% decrease in the US-dollar value of sovereign debt in default from 2022
• update key insights regarding the number, size and types of defaults
• give a historical overview of debt defaults and their persistence in heavily indebted, low-income sovereigns
• examine the shift in bilateral official sovereign lending from Paris Club lenders toward China2
• update our estimates of stocks of domestic arrears, valued in US dollars

The 2024 edition of the database and related research contain a number of enhancements, including:

• more data about defaults on China’s official loans
• revisions to country and aggregate default data for 1960 to 2022, most notably:
  • official loans and bond debt of imperial Russia repudiated in 1917 and later settled with British creditors in 1986 and with French bondholders in 1996
  • bonds repudiated by China in 1949 and later settled with British bondholders in 1987
• new data on domestic arrears by country and globally, most comprehensively for the years 1990 to 2023
• a new interactive visual showing debt in default across different regions (Figure 1)
• updates to documents with the methodology and the appendix and references

All data are downloadable in CSV, JSON and XML formats.

Key insights from the 2024 edition

The total value of sovereign debt in default fell by 1% last year

Our preliminary estimate of the total value of sovereign debt in default is US$523 billion in 2023, or 0.5% of global public debt. This is a decrease of US$7 billion, or 1%, from the revised total of US$530 billion in 2022. At the same time, we estimate that the number of sovereigns in default declined from 98 to 92. That said, tighter financing conditions impacted many Heavily Indebted Poor Countries and emerging-market and frontier sovereigns. By contrast, debt in default among advanced-economy sovereigns fell to zero last year after Puerto Rico finished its debt restructuring in 2022 and the United Kingdom repaid a long-standing obligation to Iran.

Defaults to official external creditors rose by 6% in 2023

Loans in default to official creditors increased by US$12 billion, or 6%, between 2022 and 2023, to US$215 billion but the major sub-groups of creditors each fared differently (Chart 1).3 For only the second time since 1974, there were no defaults to the International Monetary Fund. By contrast, defaults to the International Bank for Reconstruction and Development and the International Development Association—which form part of the World Bank Group—and the Inter-American Development Bank rose collectively by US$0.3 billion or 8%, to US$4.5 billion. Among bilateral creditors, identified defaults to China rose by US$10 billion, or 28%, to nearly US$50 billion, while defaults to the Paris Club remained around US$78 billion. Defaults to other official creditors (bilateral and multilateral creditors we have not identified separately) rose by US$0.8 billion, or 1% to US$82 billion.

Defaults to private external creditors fell by 9%

Debt in default to private creditors dropped by US$29 billion, or 9%, to US$281 billion in 2023. As with official creditors, big variations were observed across categories. Defaults on foreign currency bonds, which made up the largest share of defaults, fell by US$24 billion, or 10%, as the completion of Puerto Rico’s US$61 billion debt workout offset ongoing defaults by 17 sovereigns. The most notable defaults by magnitude were Venezuela (US$50 billion), Russia (US$47 billion), Lebanon (US$40 billion), Ukraine (US$30 billion) Argentina (US$22 billion) and Ghana (US$13 billion). Defaults on bank loans rose US$5 billion due to defaults by 10 sovereigns, while defaults to other private external creditors (mainly suppliers) dropped by US$10 billion, or 24%, to US$32 billion.4

Local currency debt defaults also rose, albeit from a small base

Defaults on local currency sovereign debt jumped to nearly US$27 billion in 2023, up from US$16 billion in 2022, an increase of 65%. This is the highest level since 1999 and largely reflects the ongoing restructurings in Ghana and Sri Lanka. Argentina, Liberia and Suriname recorded smaller defaults.

The distribution of defaults remains concentrated

As in previous years, the distribution of defaults in 2023 is highly concentrated in terms of value: 10 sovereigns accounted for 75% of the US-dollar value of debt in default globally (Figure 1). Just three sovereigns—Venezuela, Russia and Iraq—accounted for 35% of the overall amount in default in 2023.

2023

2023

1990

Endnotes