We project local and regional governments' (LRGs) gross borrowing will stay elevated, globally, but decrease over the coming two years, reflecting narrowing funding needs. Outside of China, we expect net borrowings will remain flat, reflecting debt growth in India, offset by deleveraging in Japan and Switzerland. Net borrowings in China are set to reduce following the projected completion of swap transactions between LRGs and their financing vehicles, and as LRGs' focus progressively shifts to limiting debt build-up. Most European countries will be constrained by balanced-budget requirements amid slow economic growth. Net borrowings will largely stabilize in Australian states and Canadian provinces, albeit higher than pre-pandemic levels, as they focus on investments in infrastructure that contribute to economic growth.