Asia Pacific governments' long-term commercial borrowing will rise to about $4.2 trillion in 2025 from an estimated $3.9 trillion in 2024, S&P Global Ratings said in a Tuesday release.
The expansion is largely due to a significant rise in Chinese central government issuance, the rating agency said.
S&P expects China's net borrowing to grow by over 50% to $2.1 trillion, as the government implements measures to stimulate economic growth amid weakness in the real estate sector.
Meanwhile, Japan will reduce its borrowing due to a narrowing budget deficit driven by increased tax revenue, S&P said.
Although most major Asia-Pacific governments will also increase borrowing, S&P expects their fiscal deficits to fall as a share of GDP due to robust growth forecasts and lower inflation expectations.
Bangladesh and Vietnam, which are the biggest speculative-grade countries by economic size, only account for 0.4% and 0.5%, respectively, of the region's central government commercial debt, S&P said.
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