Sovereign borrowing outlook for OECD countries

Chapter 1 examines sovereign borrowing, deficits and debt developments in the OECD area from 2007-2018. It presents current levels and the outlook for gross and net borrowing needs as well as redemption and debt stock profiles. The unprecedented changes in country debt-to-GDP ratios over the past decade are examined and the implications of financing conditions for sovereign debt management, within the context of monetary and fiscal developments and prospects, are discussed. The chapter also looks at recent trends in sovereign debt credit quality in OECD countries. Deeper insight is provided by a discussion of a measure to quantify and assess credit quality of sovereign bond issuance. The last section provides a brief description of the challenges facing sovereign funding under stressed conditions, as well as the policy tools available including liquidity buffer practices, to mitigate short-term refinancing and liquidity risks.