LONDON (Reuters) - Emerging market sovereign debt issuance in 2021 could reach around $140 billion, almost as high as this year, as a flurry of high-yield bond sales offsets a slowdown in investment-grade issuance, Goldman Sachs estimates.

As funding needs soared because of the COVID-19 pandemic, investment-grade sovereigns scrambled to issue debt, sending emerging market sovereign debt sales so far this year to $145 billion, at the higher end of the historical range, the bank said.

Counties at greatest risk of default have found it tougher to gain access, as shown by Turkey’s sovereign investment fund and Ukraine’s Naftogaz last month postponing bond sales as markets turned volatile in the run-up to the U.S. presidential election and drove up borrowing costs.

Goldman Sachs said its expectation of a pickup in high-yield issuance next year partly reflected its forecast for an improved outlook, with better risk sentiment helping the riskier sovereigns.

Emerging market high-yield sovereign issuance would climb to about $60 billion from $45 billion in 2020, against a slowdown in investment-grade issuance to around $80 billion from $100 billion, analysts Teresa Alves and Sara Grut said in a report.

The Gulf and Latin America were likely to remain the largest regional emerging market issuers next year, with around $37 billion and $32 billion respectively in sales, followed by Asia, the analysts said.

Higher debt maturities in 2021 point to a still relatively benign net issuance backdrop, the bank said, with Saudi Arabia, Qatar, Egypt and Mexico being the largest net issuers next year.

In contrast, dollar debt sales were not expected from Hungary and Croatia, which had moved to primarily funding themselves out of euros or their local currency, as well as high-yield sovereigns, such as Sri Lanka and Oman, in part because of higher risks of debt distress.