Debt issuance by governments of rich countries to hit record high, OECD says

Subscribe to enjoy similar stories. Governments in rich countries are set to issue a record $17 trillion in bonds this year as the higher cost of refinancing existing debts continues to push their interest bills higher, the Organization for Economic Cooperation and Development said Thursday.

The rise in issuance comes as many central banks continue to sell bonds they acquired during the years after the global financial crisis, when they struggled to raise inflation to their targets, rather than contain it. Households and foreign investors have stepped in to take up the slack, but the OECD warned those buyers are more likely to demand higher yields as geopolitical tensions and trade uncertainties mount.

In an annual report on debt issuance, the OECD said governments in rich countries are unlikely to have difficulty finding buyers for their bonds at interest rates they can afford, but that may not be true of governments from poorer countries or some companies. “The persistence of high long-term rates in core markets complicates the landscape for corporate and emerging market borrowers in particular," said Carmine Di Noia, director for financial and enterprise affairs at the Paris-based research group.

The OECD estimates that total bond issuance by its member governments rose to $16 trillion in 2024 from $13 trillion in 2023, and will rise further this year to far exceed the volumes recorded before the Covid-19 pandemic. Some 85% of that issuance will be accounted for by the governments of just five countries: the U.S., Japan, France, Italy and the U.K., with the world’s largest economy accounting for more than two-thirds of the total.