Foreword

This edition of the OECD Sovereign Borrowing Outlook presents analysis of the impact of the pandemic on sovereign borrowing needs and outstanding debt for 2020 and 2021, and provides projections for 2022 for the OECD area. It also reviews sovereign debt issuance trends in Emerging Market and Developing Economies (EMEs) in 2021, and provides an update on the impact of the COVID-19 crisis on issuance conditions of EME sovereigns. It then takes the perspective of a public debt manager and discusses approaches to incorporating ESG factors into public debt management, identifying key challenges and risks as well as the common features of emerging leading practices in both OECD and non-OECD countries.

The publication draws mainly on responses received to an annual survey on the borrowing needs of OECD governments circulated by the OECD’s Bond Market and Public Debt Management Unit. This includes an update on trends and developments associated with sovereign borrowing requirements, funding strategies, market infrastructure and debt levels from the perspective of public debt managers. The Outlook makes a policy distinction between funding strategies and borrowing requirements. Central government marketable gross borrowing needs, or requirements, are calculated on the basis of budget deficits and redemptions. Funding strategies entail decisions on how borrowing needs are going to be financed using different instruments (e.g. long-term, short-term, nominal, indexed, etc.) and which distribution channels (auctions, tap, syndication, etc.) will be used.

This year, the OECD conducted a special survey study on ‘Approaches to incorporating ESG factors into public debt management including labelled bonds’ among OECD and selected non-OECD countries. Chapter 2 draws mainly on the responses to this survey.

Comments and questions should be addressed to the Bond Markets and Public Debt Management Unit within the Financial Markets Division of the OECD Directorate for Financial and Enterprise Affairs (e-mail: [email protected]). Find out more about OECD work on bond markets and public debt management online at www.oecd.org/finance/public-debt/.