Research by IHS Global has shown the number of downgrades outpaced upgrades by a ratio of three-to-one in the second quarter of the year, as low commodities prices hurt emerging markets and Brexit led to the UK losing its top-notch AAA rating.
Credit ratings are scores of how risky a country is to buy bonds from - a lower rating means a higher chance of difficulty getting the money back, which usually leads to higher borrowing costs for the countries themselves. The UK was instantly downgraded by all three of the leading ratings agencies, Standard and Poor's, Fitch, and Moody's, after it voted to leave the EU.
So far this year there have been 61 downgrades to sovereign debt, compared to just 19 upgrades, suggesting a general deterioration of public finances across the world.
Jan Randolph, director of sovereign risk at IHS Global, said the downgrades to commodities-heavy economies had reached "record levels" this year. He also noted that high-income oil-heavy middle east countries including Saudi Arabia, the United Arab Emirates (UAE), Qatar and Kuwait were "succumbing to 'lower-oil-for-longer' rating downgrades.
"For the first time many of these countries will start to issue domestic public debt in significant quantities to help finance these deeper fiscal deficits."
A report from Fitch last month said the world was on course for a record number of debt downgrades this year. Despite that, borrowing costs for governments have still been pulling lower in many parts of the world. In the UK, 10-year government debt is trading with a yield of just 0.53 per cent - its lowest ever on record, and down from nearly two per cent this time last year.