Researchers have compiled a new dataset that can be used for analyzing government bonds, published in a recent issue of the BIS Quarterly Review.
The researchers explain what makes their dataset novel:
- The BIS is publishing a new data set on bonds issued by central and general governments, in domestic and foreign currencies.
- The issuance of government bonds has accelerated over the past decade, driving amounts outstanding to 72% of GDP at end-2020, with emerging market economy (EME) governments accounting for a quarter of the total.
- The foreign currency share of government bonds issued by EMEs has continued to decline as major EMEs have been tapping bond markets in their domestic currencies.
The new data set is useful for analyses of government debt that require comprehensive information on bonds outstanding and need to distinguish between borrowing in domestic and foreign currencies. It reveals, for instance, that government bond issuance has accelerated over the past decade, driving amounts outstanding to $58 trillion (72% of GDP) at end-2020, with EMEs accounting for a quarter of this total. In parallel, the foreign currency share in EME government bonds has trended downwards as major EMEs have tapped bond markets in their domestic currencies. A related use of the new data set, the subject of ongoing work, is to assess how changes in foreign investors’ holdings of government bonds (collected from national sources) compare with the total amounts outstanding. But the new statistics are not sufficient by themselves for analysing debt sustainability, as they exclude loans and short-term instruments.3