THE OECD Study has found that gross borrowings of OECD governments from the markets are set to reach a new record level in 2019 by exceeding USD 11 trillion. While government funding needs in the wake of the financial crisis increased in most OECD countries, the recent further increase is confined to a few countries, particularly the United States.

In 2017, the new debt issuance of OECD governments to the markets registered the lowest level since 2008, but increased by USD 600 billion to USD 1.9 trillion in 2018 and is projected to exceed USD 2 trillion in 2019.

Between 2007 and 2018, outstanding central government debt for the OECD area as a whole doubled and the debt-to-GDP ratio rose from 49.5% to 72.6%. While the new debt issuance is set to increase the nominal level of outstanding central government debt further, debt-to-GDP ratio is projected to remain at 72.6% in 2019, mainly owing to continued economic growth in the OECD area.

Compared with the pre-crisis levels, the interest rate-growth differentials – an important indicator to explain debt-to-GDP developments – in the G7 countries have improved significantly and slowed growth in debt-to-GDP ratios in recent years. Nevertheless, central government marketable debt-to-GDP ratio for the G7 countries is expected to increase and reach its highest level in 2019. Among the G7 countries, the differential is still positive only in Italy, albeit a relative improvement compared to 2007.