Asia-Pacific borrowing to reach $5t in 2026 as growth slows below 5%

China and Japan will remain the largest borrowers in the region.

Asia-Pacific governments are expected to borrow $5t in long-term commercial debt in 2026, up from $4.8t in 2025, with borrowing growth projected to slow to below 5%, according to S&P Global Ratings.

China and Japan will remain the largest borrowers in the region, together accounting for more than 80% of Asia-Pacific long-term government borrowing this year, reflecting the sizes of their economies.

The slower growth follows a surge in borrowing in recent years, including 38% growth in 2023, as the impact of China’s fiscal stimulus fades and Japan reduces borrowing.

Chinese borrowing is projected to increase by almost 15% in 2026, reaching about $2.5t compared with $2.1t in 2025, with most of the increase funded through the domestic bond market as borrowing costs remain relatively low.

Japanese government borrowing is expected to decline as tax revenue growth since early 2025 offsets higher government spending, supported by stronger corporate income tax receipts.

Most other major Asia-Pacific governments are expected to increase borrowing in 2026, with Australia accounting for the largest increase at about $18b.