LONDON, (Reuters) – Rising borrowing costs combined with the fallout from the Russia-Ukraine conflict could lead to a 10% increase in the number of emerging markets rated as ‘junk’ this year. Analysts at JPMorgan (NYSE) warned that the riskier countries will be facing debt crises.

Increased balance of payment problems and bigger fiscal deficits mean that heavily indebted countries, which import the majority of their food and energy, are facing more acute financial pressures.

In our analysis, nearly half of country samples are classified as high-repayment risk. Eight of these countries are most at risk from a depletion of their reserves by 2023. This indicates high default risks. They are Sri Lanka (Maldives), Maldives, Bahamas Senegal Belize Senegal Rwanda, Grenada and Ethiopia,” stated Trang Nguyen in a note on Tuesday.

Due to rising inflation, many face the fact of higher borrowing costs. It is an abrupt departure from “easy money” for over a decade.

The note stated that “Accounting for the risks of a default in Russia or restructuring in Ukraine…the EM sovereign HYdefault rate could reach 10% in this year’s case when considering Sri Lankan and Ethiopia as part of the Common Framework process.”