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The OECD Sovereign Borrowing Outlook 2017 is published this year for the fifth time as a stand-alone publication


This edition of the OECD Sovereign Borrowing Outlook examines net and gross sovereign borrowing in OECD countries from 2007 to 2017. It first looks at net and gross borrowing needs of OECD governments in the context of fiscal developments. It then considers recent trends in central government marketable debt in the OECD area and central government debt ratios for groups of selected OECD countries. Finally, the report examines funding strategies and instruments including growing issuance of debt with 30 or more years of maturities; liquidity in secondary markets; implications of a low interest environment for government debt; and the outlook of inflation linked bonds.

Key findings

  • Sovereign gross borrowing needs in the OECD area have continued to decline from the peaks attained in 2012. They are expected to be USD 9.5 trillion in 2017, approximately the same level as 2016.
  • Net borrowing needs have also declined but continue to be positive and are projected to remain flat in 2017 for the OECD area, reflecting the fact that underlying fiscal balances are becoming more expansionary. Until 2016, net borrowing requirements in the OECD area declined steadily from the peaks attained in 2009.
  • Sovereign debt levels have continued to increase and debt levels are high by historical standards, although exchange rate developments are complicating the interpretation of such aggregates.
  • After surging from 49.8% to 74.6% between 2007 and 2015, the central government marketable debt-to-GDP ratio has started to decline and is estimated to be 73% in 2017. Among country groups the decline in the debt-to-GDP ratio is more significant for G7 countries.
  • Interest rates remain low and are even negative for approximately USD 10 trillion of outstanding high-credit-quality sovereign debt. This situation facilitates the servicing of debt. It also makes debt-funded public investments to kick-start real activity growth relatively less costly and more attractive, without obscuring the medium- to long-term need for continued measured fiscal consolidation.
  • Debt managers are reacting to fiscal challenges by lengthening redemption profiles, thus limiting rollover risks. This strategy tends to involve higher debt-servicing costs over the short term but, at the current juncture, such costs are very limited.
  • Ultra-long government bond issuance has increased significantly, partly driven by attempts to lock in low long-term interest rates. Annual volumes of ultra-long bonds almost tripled between 2006 and 2016, with the number of issues doubling over the same period.
  • The outstanding volume of inflation-linked debt in OECD area more than doubled between 2007 and 2015, and is expected to exceed USD 3 trillion in 2017. While the long-term trend has mainly been determined by the group of G7 countries in parallel to the change in funding strategies and borrowing needs in these countries, regional aggregates also indicate an increasing popularity of linkers in Emerging Markets (EMs) where near-term inflationary pressures are arguably more of a concern.

Comments and questions should be addressed to the Bond Markets and Public Debt Management Unit within the Financial Affairs Division of the OECD Directorate for Financial and Enterprise Affairs (e-mail: Publicdebt@oecd.org). Find out more about the Bond Markets and Public Debt Management Unit online at