Rich countries to borrow less as crisis eases: OECD

Tags: News
The world's richest countries will borrow less from the market this year than at any time since 2007, the OECD said today, as governments tighten their belts in the wake of the debt crisis.

The Organisation for Economic Cooperation and Development estimated that the net new borrowing needs of its 34 member countries would fall to $1.5 trillion (1.09 trillion euros) this year.

This is a sharp drop from the $2.0 trillion last year and less than half the borrowing requirement at the height of the debt crisis in 2009 when they borrowed $3.3 trillion.

The drop is mainly due to governments reining in the ballooning deficits and debt that sparked the debt crisis in the first place.

Net new borrowing is the amount raised on the markets minus the redemptions governments receive when their sovereign bonds mature.

Gross borrowing is also set to fall in the OECD club of advanced democracies -- from $10.8 trillion in 2013 to $10.6 trillion this year.

However, the OECD warned that the next few years could see a hive of activity on the bond markets given what it termed a "challenging" redemption profile.

"For the OECD area as a whole, governments will need to refinance close to 29 per cent of its outstanding long-term debt in the next three years," the report said.

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