The gross borrowings of OECD governments, which jumped by 70% in 2020 following the outbreak of COVID‑19, are expected to gradually stabilise as economies recover and pandemic-related fiscal support is withdrawn. Aggregate government market borrowing needs are projected to decline slightly from above USD 16 trillion in 2020 to around USD 14 trillion in 2022, with marked differences across countries.
OECD government net marketable debt issuance is expected to decline from USD 8 trillion in 2020 to around USD 3 trillion in 2021. It is projected to remain at around the same level in 2022, which is double pre‑pandemic levels.
Since 2019, the outstanding level of marketable debt for OECD governments increased by more than USD 10 trillion to USD 50 trillion in 2021, and is projected to reach USD 53 trillion in 2022. As a percentage of GDP, central government marketable debt for the OECD area rose by more than 16 percentage points to 90% in 2020, and is expected to gradually decline to 88% in 2022, driven inter alia by stabilised borrowing needs and low interest payments. These estimations for 2022, made before the war in Ukraine, are now subject to the economic effects of the war, as well as the monetary and fiscal policy responses.
The cost of borrowing has risen, but remains at low levels across OECD countries. In the OECD area, nearly 70% of the fixed-rate government bonds issued in 2021 were for a yield less than 1%. This ratio was 80% in 2020 and 37% in 2019.
Many countries sought to mitigate refinancing risk by lengthening issuance maturities. The average term-to-maturity of outstanding debt has almost fully returned to a pre‑pandemic level standing at 7.6 years in 2021 and reached record highs in 16 OECD countries including France, Italy, Portugal, Spain and the United States.
Despite the extended maturities of new issuance, debt redemption profiles are expected to be elevated and may pose significant challenges in terms of refinancing risks, with 40% of outstanding marketable debt stock needing to be refinanced or repaid within the next three years.
Given the refinancing needs, rising yields, inflationary pressures and the prospects of less accommodative monetary policy, it is important for sovereign debt managers to strengthen investor relations and remain transparent and predictable in providing guidance to investors. They may also explore new borrowing instruments to support financing capacity.
- Going forward, downside risks to the outlook include the potential emergence of new COVID‑19 variants, persistent inflation and mounting geopolitical tensions. To ensure the continued smooth functioning of government securities markets, debt managers should remain vigilant, closely monitor the resilience of market intermediaries and co‑ordinate with the relevant authorities to promptly address possible stressed market conditions. Authorities may benefit from tools such as security lending facilities, flexibility in their approach to issuance and maintaining contingency buffers to be able to absorb possible stress in markets.
2021 Outlook - excel data
2021 - excel data
2020 Special COVID-19 edition - excel data
2019 - Highlights - Key findings ppt
2018 - Highlights - Key findings ppt
2017 - Highlights
2016 highlights (pdf)
2011 highlights (pdf)
October 2010 (pdf)
January 2010 (pdf)
November 2009 (pdf)