OECD updates Sovereign Borrowing Outlook

The OECD’s revised version of the Sovereign Borrowing Outlook (originally released in February 2020)  incorporates new data and analysis on the impact of the Covid-19 crisis.

It says that, despite generally volatile market conditions, OECD governments raised a record amount of funds from the markets during the first five months of 2020. The total amount of government securities issued between January and May 2020 reached USD 11 trillion, which was almost 70 % higher than the average amount issued in the same period over the past five years.

In the context of highly uncertain economic outlook for the rest of the year, the survey results indicate that gross borrowing needs of OECD governments will increase by almost 30 % in 2020 compared with the pre-COVID estimates. Sovereign debt managers have reported that the current challenge is to increase issuance without undermining the functioning of sovereign debt markets.

For the OECD area as a whole, outstanding central government debt is expected to increase from USD 47 trillion in 2019 to USD 52.7 trillion at the end of 2020. This is USD 3.5 trillion higher than the pre-COVID estimate. As a result of both the rapid increase in borrowing needs and the decline in GDP across OECD economies, the central government marketable debt-to-GDP ratio for the OECD area is projected to increase by 13.4 percentage points to around 86 % in 2020, the largest increase in a single year since 2007.

You can find the full report here