Jenny Chu

Credit Agencies Disagreement on Sovereign Debt Levels

Despite its importance as an economic indicator, the measurement standards underlying the general government debt number remain non-comparable across countries. In response, credit rating agencies (CRAs) perform accounting adjustments to transform inconsistent fiscal data into best possible comparable figures for rating purposes. This study investigates how and why credit agencies disagree on the level and composition of sovereign debt owed by countries. We examine dispersion in the three major CRAs’ assessment of general government debt for 132 countries from 2006 to 2019. The dispersion is economically significant, averaging 3.53% of GDP in our sample, with values ranging from 0% to 46.42% of GDP. The cross-agency dispersion mainly derives from differences in which debt instruments are covered and whether the debt owed by specific government and quasi-government institutions is included.

Project Update - August 2025