The OECD Sovereign Borrowing Outlook 2013


Cover(CC) OECD

The OECD has just published the report Sovereign Borrowing Outlook 2013. According to the study the gross borrowing needs of OECD governments are projected to increase slightly to around USD 10.9 trillion in 2013, up from the already high level of USD 10.8 trillion in 2012.

The report expects that ratings agencies will continue to keep the pressure on governments in 2013. Given their poor track record of sovereign risk pricing over the past twenty years, the report suggests that any downgrades should be carefully scrutinized, and not taken at face value.

The general government deficit for the OECD area as a whole is estimated to have reached 5.5% of GDP in 2012, equivalent to around USD 2.6 trillion. It is projected to decrease to 4.6% of GDP in 2013, equivalent to around USD 2.3 trillion, while net borrowing is estimated to fall to USD 2.0 trillion in 2013.

Government debt ratios for the OECD as a whole are expected to grow or remain at high levels during the coming year. General government debt-to-GDP is projected to reach 111.4% in 2013. The good news, according to the report, is that overall debt ratios are increasing much more slowly than in the past, declining from an increase of 11.5% in 2008-2009 to a projected 1.1% increase in 2013-2014.

The whole report is available for the IESE Community here.