Total frontier market (FM) debt surged by over $160 billion in 2024, reaching nearly $3.8 trillion the fastest accumulation since 2021. Government borrowing led the increase, with Pakistan, Kenya and Romania seeing the largest buildup.

Total debt in frontier markets increased by over $45 billion in H1 2024, reaching a new record high of $3.7 trillion. At 102% of GDP, total debt in frontier markets stands more than 7 percentage points above pre-COVID levels.

We forecast sustained growth in the region this year and next, driven by strong services and remittances. Nearshoring opportunities have driven an upturn in foreign direct investment flowing into key countries. Addressing institutional shortcomings remains crucial for attracting broader investment.

In 2023, frontier market (FM) accumulated some $20 billion of new debt, bringing the total to $3.5 trillion. For the first time since 2020, the FM debt-to-GDP ratio increased, as growth and inflation subsided.

After reaching an all-time high of $3.5 trillion in Q1 2023, total debt in frontier markets (FM) saw a slight decline in Q2 2023.

Some $120 billion was added to the debt pile of frontier markets in 2022, bringing it to an all-time high of $3.6 trillion.

The ESG debt universe has grown rapidly, to near $4.5tr in Q322, up from $3tr in Q321 and $1.5tr in Q320. However, overall ESG debt issuance has slowed sharply this year amid broader debt market disruption.

CCA countries have shown remarkable resilience in the face of external shocks. A sharp increase in tourism receipts and remittances, along with high energy prices, led to solid growth. While the terms of trade shock has had diverging effects on the region.