OECD Sovereign Borrowing Outlook

2306-0476 (online)
2306-0468 (print)
Next Edition: 19 May 2017
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Each year, the OECD circulates a survey on the borrowing needs of member countries. The responses are included in the OECD Sovereign Borrowing Outlook, an annual publication looking at trends and developments associated with sovereign borrowing requirements and debt levels, from the perspective of public debt managers. The Outlook provides data and information on borrowing needs and funding policies for the OECD area and other country groupings. Its coverage includes gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.

OECD Sovereign Borrowing Outlook 2016

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31 Aug 2016
9789264257313 (PDF) ; 9789264257320 (EPUB) ;9789264257306(print)

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The OECD Sovereign Borrowing Outlook provides regular updates on trends and developments associated with sovereign borrowing requirements, funding strategies, market infrastructure and debt levels from the perspective of public debt managers. The Outlook makes a policy distinction between funding strategy and borrowing requirements. The central government marketable gross borrowing needs, or requirements, are calculated on the basis of budget deficits and redemptions. The funding strategy entails decisions on how borrowing needs are going to be financed using different instruments and which distribution channels are being used. This edition provides data, information and background on sovereign borrowing needs and discusses funding strategies and debt management policies for the OECD area and country groupings. In particular, it examines: gross borrowing requirements; net borrowing requirements; central government marketable debt; interactions between fiscal policy, public debt management and monetary policy; funding strategies, procedures and instruments; the impact of new regulations on primary market operations; liquidity in secondary markets; and the transparency of public debt statistics, operations and policies.

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  • Foreword

    The 2016 edition of the OECD Sovereign Borrowing Outlook provides data, information and background on sovereign borrowing needs and discusses funding strategies and debt management policies for OECD countries and the OECD area, including:

  • Acronyms and abbreviations
  • Editorial

    The OECD Sovereign Borrowing Outlook 2016 (the Outlook) indicates that the combined gross borrowing needs of governments have declined gradually in recent years, thanks to tighter fiscal policies. Nevertheless, net borrowing requirements are still positive and fiscal consolidation efforts have slowed in response to fragile economic growth. As a result, central government debt to GDP ratios in OECD countries remains above 70% (and close to 90% in G7 countries). This remains high by historical standards, despite a slight decline in 2015 and estimated decline in 2016.

  • Executive summary

    Sovereign borrowing in the OECD area, which had risen rapidly as result of the policy response to the global financial crisis, has declined owing to fiscal consolidation. However, net borrowing remains positive. The level of sovereign debt against the backdrop of slowdown in real activity remains high by historical standards. Surveys of the outlook for borrowing indicate that aggregate central government marketable debt across the OECD will rise slowly but steadily and exceed USD 40 trillion in 2016.

  • Sovereign borrowing outlook for OECD countries

    This chapter examines sovereign borrowing needs in OECD countries from 2007 to 2016. It first looks at the net and gross borrowing needs of OECD governments in the context of ongoing fiscal consolidation. It then considers recent trends in central government marketable debt in the OECD and general government debt ratios for selected OECD countries, as well as current interest rates and the possible medium to long-term effect of negative interest rates. Finally, the chapter examines the relationship between monetary policy and debt management decisions, the role of public institutions as investors in sovereign bonds and growing concerns about secondary market liquidity.

  • Primary market developments for government bonds

    This chapter discusses the functioning of primary markets, in particular by providing an overview of recent changes in issuing strategies, procedures and techniques, in response to regulatory changes and their impacts on issuance. Some of these changes, while understandable, might pose new challenges for debt managers. To the extent that debt managers are becoming more opportunistic, issuance programmes will be less predictable. That situation may not be desirable in the longer term. Debt management offices (DMOs) emphasize therefore that they aim at using a transparent debt management framework, supported by a strong communication policy. In this context, some DMOs took concrete steps to increase the predictability and transparency of their primary market operations.

  • Liquidity in secondary markets for government bonds

    This chapter discusses changes in liquidity in secondary government bond markets. Debt managers (and market participants) have expressed concerns that some of the regulatory changes in response to the global financial crisis may have an adverse (direct) impact on liquidity in secondary markets for government bonds. Debt Management Offices (DMOs) argue that lower liquidity in these markets is likely to affect primary market issuance in the form of a rise in borrowing cost.

  • Transparency of public debt: Statistics, operations and policies

    Drawing on the work of the OECD Task Force on Transparency of Debt Statistics, Operations and Policies, this chapter examines growing importance of transparency for public debt management and the benefits that increased transparency can bring. Enhanced transparency of strategies, operations and policies for public debt management reduces investor uncertainty, thereby increasing the attractiveness of government bond markets. This in turns broadens the investor base, lowers risk premiums and decreases borrowing costs. The chapter focuses on six areas – indicators and measures for central government debt; gross borrowing measures; indicators and measures for public debt management strategies; methods for duration and maturity calculations; and measures for roll-over risk – and offers concrete recommendations to those managing government debt.

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