Fitch, a credit rating agency on Thursday, downgraded its outlook on sovereign debt on Thursday due to rising global borrowing costs and concerns about the possibility of a new wave.

Fitch, which monitors more than 100 countries, said the war between Ukraine and Russia was triggering issues such as high inflation, trade disruptions and weak economies, which are now affecting sovereign credit conditions.

“Higher interest rates increase government debt service spending,” said James McCormack, head of the sovereign appraisal division at Fitch Ratings, which downplayed the company’s view of the sovereign sector from “improving” to “neutralizing”.

Again, as the pressure increased, the number of countries experiencing reductions in their credit ratings this year began to increase.

Most governments, including Fitch, have introduced subsidies or implemented tax cuts in an effort to mitigate the impact of high inflation. But this had its price.

“The positive effects of inflation on government debt mechanisms could induce a moderate financial decline, such effects depend on maintaining low interest rates, and this is not certain,” McCormack said.

Although exporters of goods will benefit from higher prices, those who have to import energy or food in bulk will be affected.

The number of countries on the list of default countries or bonds in the financial markets is 17, which is a record level.

These countries are Pakistan, Sri Lanka, Zambia, Lebanon, Tunisia, Ghana, Ethiopia, Ukraine, Tajikistan, El Salvador, Suriname, Ecuador, Belize, Argentina, Russia, Belarus and Venezuela.