This report does not constitute a rating action. Even though public investment needs will remain elevated in many countries, balanced budget rules should induce most subnational governments in Europe to streamline their capital expenditure plans. On the other hand, debt will accumulate faster in Asia-Pacific. For our in-depth analysis on this topic, see " Subnational Government Outlook 2025: Developed Markets' Regional Differences Intensify ," published Jan. 16, 2025, on RatingsDirect. We expect annual gross borrowings for subnational governments in developed markets will remain relatively stable at about $1 trillion per year through 2026. Investments in infrastructure, water and wastewater management, and other public facilities, such as schools and nursing homes, will be the main debt drivers. A slowdown in population
