OMFIF: Public Sector Debt Outlook Survey 2025
Borrowers have expressed their key worries and expectations for the year ahead in OMFIF Sovereign Debt Institute’s 2025 Public sector debt outlook survey.
The annual survey of global sovereign, supranational and agency borrowers provides a detailed outlook on funding programmes, sustainable issuance, primary dealers, distribution of bonds, role of non-banks and more. This year’s survey was completed by 32 SSAs, comprising some of the biggest and most prestigious issuers in the market.
Key findings:
Geopolitical risks and tariffs are key macro concerns – 97% of issuers highlighted geopolitical instability as one of their top three macro concerns, with 42% selecting it as their single biggest worry. 78% stated impact of tariffs and trade wars as one of their top three macro concerns.
Wider spreads the biggest funding concern – Expectation of wider spreads was highlighted as the biggest funding concern by borrowers, with 85% of respondents selecting this as one of the top three worries. Just over 40% selected wider spreads as their single biggest funding concern. Meanwhile, 68% highlighted volatile markets as one of their top three worries.
Demand and new issue premiums to remain stable – Borrowers do not on the whole expect a substantial difference to demand and new issue premiums compared to 2024. The majority of respondents (47%) expect subscription ratios to remain at two to three times, in line with last year. Meanwhile, 69% expect new issue premiums to stay the same as 2024
Distribution to investors most valued – 94% of issuers selected this as one of the three most valued aspects of primary dealers, while 60% selected this as the single most valued aspect. The next most valued aspect was secondary market liquidity with 85% selecting this as one of their top three most valued areas of primary dealers.
Net increase across all investor types – Borrowers expect a net increase across all investor types compared to 2024, with a particular rise in asset managers (31%), central banks and official institutions (25%). However, 22% said they expect the composition of central banks and official institutions to decrease. By geographical distribution, borrowers expect an increase from Europe (28%) with a slight decrease from Asia Pacific (-13%) and North America (-12%).
Split view on role of non-banks – 35% expect non-banks to be more active in both primary and secondary markets in 2025 – a rise from 25% in 2024. However, the same number of respondents (35%) said they expect non-banks to not play an active role in primary or secondary markets, highlighting a clear divide.
Greenium to remain minimal – The vast majority of respondents (97%) expect the greenium to remain either non-existent or minimal, with 45% stating the former.
Borrowers keeping close eye on digital bonds – 34% of respondents said they have no plans to issue a digital bond. However, 53% said that while they are not currently working on a digital bond, they are watching market developments.
