OECD Sovereign Borrowing Outlook 2014

image of OECD Sovereign Borrowing Outlook 2014

Each year, the OECD circulates a survey on the borrowing needs of member countries. The responses are incorporated in the OECD Sovereign Borrowing Outlook to provide regular updates of trends and developments associated with sovereign borrowing requirements 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 (e.g. long-term, short-term, nominal, indexed, etc.) and distribution channels.

Accordingly, the OECD Sovereign Borrowing Outlook provides data and information on borrowing needs and funding policies for the OECD area and country groupings, including gross borrowing requirements, net borrowing requirements, central government marketable debt, funding strategies and instruments and distribution channels.



Sovereign borrowing overview

Total OECD gross borrowing requirements are expected to have fallen slightly from USD 11 trillion in 2012 to USD 10.8 trillion in 2013 and are projected to drop to around USD 10.6 trillion in 2014. Net borrowing is estimated to fall to USD 1.5 trillion in 2014. However, debt ratios for the OECD area as a whole are expected to grow and general government debt for a group of OECD countries is even projected to surpass the World War II peak.Raising the required funds remains a challenge. Most OECD debt managers continue to rebalance debt portfolios by issuing more long-term instruments, and seeking to moderate bill issuance. Enhancing fiscal resilience encourages maintaining diverse nominal and variable rate instruments along the maturity spectrum.Long-term real and nominal rates, as well as volatility of benchmark yields, were very low as of early May 2013, but then US yields rose sharply after the Federal Reserve signalled possible tapering of bond purchases.




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