Government Debt

Claudio Borio, head of the Bank for International Settlements' monetary and economic department, said he was on alert for a government debt glut causing bond market ructions

China on Friday approved a 6 trillion yuan ($839 billion) plan to help local governments refinance their mountains of debt, in the latest push to rev up growth in the world's second largest economy. The plan will be implemented over the next three years, Xu Hongcai, vice-chairman of the National People's Congress's financial and economic committee, said at a news conference Friday. Finance minister Lan Fo'an estimated that the hidden debt of local governments was 14.3 trillion yuan ($2 trillion) at the end of 2023. Hidden debt refers to debt that has not been disclosed publicly. Lan said 2 trillion yuan would be allocated each year from 2024 to 2026 to help local governments resolve their debts. He estimated that the amount of hidden debt will drop to 2.3 trillion yuan ($320.9 billion) by the end of 2028. Officials also said Friday that the ceiling to issue special bonds will be raised to 35.52 trillion yuan ($4.96 billion) from 29.52 trillion yuan ($4.12 billion) for local ...

The government estimates its debt, including external borrowing, valued at current exchange rate and public account and other liabilities will increase to Rs 185 lakh crore, or 56.8 per cent of the GDP, during the current fiscal year. The total debt stood at Rs 171.78 lakh crore, or 58.2 per cent of the gross domestic product (GDP), at the end of March 2024, Minister of State for Finance Pankaj Chaudhary said in a written reply to the Lok Sabha on Monday. As per the International Monetary Fund, World Economic Outlook, April 2024, India's Gross Domestic Product at current prices has already reached USD 3.57 trillion in 2023-24, he said. Replying to another question, Chaudhary said the growth rate of the private final consumption expenditure (PFCE) at constant prices in 2022-23 and 2023-24 is 6.8 per cent and 4 per cent, respectively, he said, quoting provisional GDP estimates for 2023-24 released by the National Statistical Office. The growth rate of PFCE at current prices in 2022-2

Public sector net borrowing, excluding state-controlled banks, was a larger-than-expected $18.75 billion last month

High US govt debt can increase risks

'India is poised to remain one of the fastest-growing countries globally in the next few years as the robust economic momentum is proving resilient,' the ratings agency said

The pullback has left the 10-year yield around 7.20%, which traders say is attractive

The International Monetary Fund (IMF) had warned in its report that India's general government debt could exceed 100 per cent of gross domestic product (GDP) in the medium term

General govt debt may exceed 100% of GDP in medium term, warns Fund

States' debt will remain elevated at 31-32 per cent of their gross domestic product amid higher capital outlays and moderate revenue growth this fiscal, with overall borrowings likely to rise by 9 per cent to over Rs 87 lakh crore, a report said. Indebtedness of a state is measured as the ratio of its debt to gross state domestic product (GSDP). Before Covid, the debt-GSDP ratio was at 28-29. But the aggregate gross fiscal deficit (GFD) as a ratio of GSDP is expected to remain at 2.5, well below the mandated level of 3 under the Fiscal Responsibility and Budget Management Act, according to a Crisil Ratings report. With lower-than-expected revenue growth, states are forced to borrow more to expand capital outlays, besides meeting high committed revenue expenditure related to salaries, pensions and interest costs. This, along with modest single-digit revenue growth, will keep the debt level high at 31-32 per cent of their gross domestic output. The report is based on the numbers ...

However, the status paper maintained that the risk profile of India's government debt stands out as safe and prudent

The government's total gross debt increased by 2.2 per cent quarter-on-quarter to Rs 159.53 lakh crore in April-June this fiscal, a finance ministry report said on Friday. The liabilities stood at Rs 156.08 lakh crore at March-end. "This represented a quarter-on-quarter increase of 2.2 per cent in Q1 2023-24. Public debt accounted for 89.5 per cent of total gross liabilities during the quarter," according to the Public Debt Management report for the April-June 2023 quarter. Nearly 26.6 per cent of the outstanding dated securities had a residual maturity of less than 5 years, it said. Since April-June 2010-11, the Public Debt Management Cell (PDMC), the Budget Division in the finance ministry, has been bringing out a quarterly report on debt management on a regular basis. During the first quarter of 2023-24, the central government on the issuance/settlement basis of dated securities raised the gross amount of Rs 4.08 lakh crore, and Rs 2.71 lakh crore after adjusting for switches.

The total liabilities of the government increased to Rs 147.19 lakh crore at September-end from Rs 145.72 lakh crore at the end of June this fiscal year, according to the latest data on public debt. In percentage terms, it reflects a quarter-on-quarter increase of 1 per cent in second quarter of 2022-23. Public debt accounted for 89.1 per cent of total gross liabilities at September-end 2022, up from 88.3 per cent as on June 30, the quarterly report on public debt management released by the finance ministry on Tuesday said. Nearly 29.6 per cent of the outstanding dated securities had a residual maturity of less than 5 years, it said. During the second quarter, it said, the central government raised Rs 4,06,000 crore through dated securities, as against notified amount of Rs 4,22,000 crore in the borrowing calendar, while repayments were at Rs 92,371.15 crore. The weighted average yield of primary issuances hardened to 7.33 per cent in Q2 FY23 from 7.23 per cent in Q1 FY23, it said

Analysts at JPMorgan put an 'underweight', or sell sign, on international emerging market sovereign debt on Friday due to the global economic slowdown and ongoing rise in interest rates and dollar

Says credit profile reflects strengths like large and diversified economy, but warns that country is highly exposed to climate change events

Government committed to its fiscal deficit targets, says senior civil servant

He shared a chart sharing such details and said while the government's debt in 2014 was Rs 56 lakh crore, it is Rs 139 lakh crore in 2022.

Governments across the world have ramped up borrowing since the Covid-19 pandemic erupted two years ago, as they tried to shield their economies from the fallout.

The higher average maturity lowers the rollover risk, the Survey noted

Government debt is held predominantly in domestic currency: MoS Finance