Biggest economies face €6.5 trillion refinancing bill in 2016

The amount of debt that the governments of the world’s leading economies will need to refinance in 2016 will be little changed from last year as nations make strides in cutting budget deficits to a third of the highs seen during the financial crisis.

The value of bills, notes and bonds coming due for the G7 nations plus Brazil, China, India, and Russia will total $7.1 (€6.53) trillion, compared with $7tn in 2015 and down from $7.6tn in 2012.

Japan, Germany, Italy, and Canada will all see redemptions fall, while the US, China, and the UK face increases.

The amount of maturing debt has gradually fallen since 2012.

The decline may bring some support to the bond market as the US Federal Reserve gradually raises interest rates, pushing yields up from record lows.

Budget deficits are forecast by economists to narrow for a seventh straight year in 2016 as governments extend the maturity of their outstanding debt and continue to cut back on the extra spending put in place to combat the global financial meltdown.

While the decline shows there’s less pressure on governments to borrow, it doesn’t necessarily mean they will issue less.

Germany plans to boost its bond and bill sales to €203bn this year from about €175bn 2015, partly to finance expenses caused by a record influx of migrants.


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