Central banks increasingly worried about 'unsustainable' government debt levels

Geopolitics remains primary concern

Central banks are increasingly worried about elevated levels of government debt, with many arguing this could stifle demand for sovereign bonds.

According to a UBS survey of reserve managers from 40 central banks, around 37% of respondents argued risks coming from "unsustainable government debt levels" have grown in importance in the last year, up from 14% a year before. Around 46% of those interviewed said they are worried debt sustainability issues could lead to a decline in demand for government bonds. However, the number of respondents concerned about the risk of a global economic recession has dropped significantly, from 56% in 2023 to only 13% in 2024. Geopolitical conflicts remained the main concern for many responde...