Global Government Borrowing To Hit $4.8 Trillion, Report

Total bond issuance and bank loans by national, regional, and local governments is estimated to hit $4.8 trillion in 2005, three per cent higher than in 2004, according to Standard & Poor’s in its first global survey of government borrowing. The report is entitled, “Global Government Borrowing to Hit 4.8 Trillion In 2005, As Credit Quality Continues to Improve.” Adjusting for the weakness of the US dollar, however, global issuance volumes should fall slightly, said the ratings agency. This would be consistent with the mildly positive trend in government ratings worldwide that Standard & Poor’s expects to continue at least through the first half of 2005. Standard & Poor’s estimates that global borrowing by sovereigns alone will reach $4.1 trillion in 2005, up five per cent from $4.0 trillion in 2004. The world’s largest issuer will remain Japan at $1.7 trillion. Its 2005 borrowing requirement will rise eight per cent from 2004, as the Japanese government turns more to market sources for its funding requirements. On the other hand, the second largest global borrower, the US government, is expected to see its borrowing requirement fall by just less than six per cent to $806bn, as the result of a modest fiscal adjustment.

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