The volume of public domestic debt issued in developing countries has grown substantially in recent years, but consistent data on the domestic debt of developing countries have not been generally available until now. As part of the Open Data Initiative, the World Bank is launching an online, quarterly, Public Sector Debt database developed in partnership with the IMF, which will allow researchers and policymakers to explore questions about debt management in a comprehensive manner. The database promotes consistency and comparability across countries by standardizing the treatment of public sector debt, valuation methods, and debt instruments, and by identifying, where possible, the debt of central, state, and local governments as well as extra-budgetary agencies and funds.
Public domestic debt has implications for local financial markets because of its effect on liquidity, pressure on interest rates, and potential crowding out of private borrowers. The size of domestic debt markets in emerging markets has grown dramatically since the 1997 Asian financial crisis. Indeed, it is an indicator of an emerging financial market that there is a market for domestic debt securities. According to the Bank for International Settlements (BIS), the estimated size of local currency debt markets was about US$7 trillion as of June 30, 2008.
In the current economic and financial environment, data on public sector debt are becoming very important for assessing vulnerability to shocks, constraints on fiscal policy, and government liquidity and solvency. Emerging market countries have increased their issuances of local currency denominated debt in domestic markets to correct currency and maturity mismatches. And many governments will incur higher deficits over the next few years, which will generate higher debt levels and bring debt into the forefront of national and global policy discussion in the future.
Policymakers and analysts will find the online Public Sector Debt database to be a valuable tool. For the first time, they will have easy access in one place to timely and reliable public sector debt data, updated on a quarterly basis. We hope that this will contribute to sound macroeconomic policymaking, and that more countries will join this initiative. By making the data publicly accessible through the Open Data site, these data along with other data available on data.worldbank.org will contribute to new analysis, research, and innovative applications.
Also see, Press Release: World Bank and IMF Launch Quarterly Online Public Sector Debt Database