As China’s $2.7 trillion real estate industry debt crisis spreads to other sectors of the economy, the value of bond defaults in the country this year has already surpassed the total from the previous year.

Augus To, deputy head of research at ICBC International, said defaults by Chinese issuers had topped $20 billion thus far this year, compared to around $9 billion last year. The majority of the defaults have been attributed to real estate developers.

“The defaults may be peaking this year,” he said. “Uncertainties will linger on in the remainder of the year or even next year. Improvement may come but will take a longer time to materialize.”

These forecasts come at a time when the economic growth of the second-largest economy in the world slowed to its lowest rate in two years, new home prices fell for a tenth straight month, and unfinished homes sparked a mortgage boycott movement. All of these events occurred against significant fluctuations in the world’s financial markets amid rising interest rates and recession worries.

China’s economic growth fell significantly in the second quarter of 2022, underscoring the enormous toll that widespread COVID lockdowns have had on activity and signaling ongoing pressure from a dimming global outlook in the coming months. Authorities raised interest rates to rein in skyrocketing inflation, further burdening consumers and companies worldwide as they deal with the effects of the Ukraine war and supply chain disruptions.

Meng Ting, the senior Asia credit analyst at ANZ Bank China, said 19 Chinese enterprises, including 18 property developers, have defaulted in the offshore market so far this year, coming very near the year total of 21 in 2021.

“Credit risk is still relatively high, firstly in the property sector, and secondly the [property risk] is sending shocks to the financial and banking systems,” said Meng.

China Evergrande Group, the most-indebted developer in the world, has failed to obtain investor permission to postpone an onshore bond payment further, potentially resulting in its first onshore bond default. Despite a self-imposed July deadline to provide a preliminary plan, Evergrande has not yet reached an agreement with its overseas bondholders about restructuring the troubled real estate titan, according to sources close to the situation.

After experiencing months-long financial issues, Evergrande, which owes more than $300 billion in obligations, stopped making payments on its U.S. currency bonds in December 2021.

After receiving updates from creditors and threats of legal action, the real estate developer agreed to provide a preliminary restructuring plan in six months, at the end of January. Since that time, there have been extensive conversations between counsel for Evergrande’s creditors and the corporation over what is expected to be a complex and protracted debt restructuring.

Advisors are still performing due diligence on the extent of Evergrande’s assets and obligations.

Ronshine China Holdings and Shimao Group Holdings missed two bond payment deadlines earlier this month.