(Bloomberg) -- Global finance chiefs are poised to march out of their Group of 20 meeting with a sense of collective reticence to talk about just how much they’re borrowing. 

In the same week that S&P Global Ratings predicted sovereign debt issuance will balloon this year about $11.5 trillion, more than 50% above its pre-pandemic level, ministers and finance chiefs in Sao Paulo seem far keener to talk up the world economy’s outlook.

That’s underscored by their draft communique, obtained on Tuesday by Bloomberg. While applauding the increased likelihood of a “soft landing” and the prospect of “faster-than-expected disinflation,” it has the fewest mentions of “debt” and associated words in years.

The omission is all the more remarkable considering the fiscal legacy of pandemic and inflation-related support that has left a mountain of borrowing across many of the world’s biggest economies. Higher costs of servicing that burden, and newly found defense spending commitments are adding to that challenge.

China, which S&P projects to overtake Japan this year as the second-largest sovereign issuer for the first time on record, may have played a part there.

Its delegates objected to what they said was undue emphasis on rising debt, in a section of the communique devoted to the world economy’s top challenges, according to conversations that took place on Monday in Sao Paulo. Chinese officials had no immediate response to a faxed request for comment.

US Shutdown Threat

A scant mention of debt is all the more notable against the immediate backdrop to the G-20 gathering. Ministers and their deputies arrived in Brazil alive to the danger of a possible government shutdown in the US as a March 1 deadline looms to approve spending bills. 

While the communique may yet change, its shifting emphasis for now reflects how the global economic outlook has altered in a short space of time. 

With the inflation monster seeming tamer than it was, and the prospect of rates falling, treasuries may suddenly have increased visibility on the fiscal risks.

“The issue isn’t debt, it’s growth, the best way of getting rid of a high level of debt is getting more growth,” French Finance Minister Bruno Le Maire told reporters in Sao Paulo on Wednesday.

Elections provide another motive to play down the dangers. S&P reckons that countries holding votes in 2024 will account for more than half of total borrowing, with US issuance alone set to rise by $1 trillion. Key ballots are due there and in G-20 members Mexico, Indonesia, South Korea, India, South Africa and the UK.

The draft communique mentions “debt” or “indebtedness” only five times — down from 13 at its last gathering in Marrakech in October and similar numbers at prior meetings. The last time the tally was lower was in 2017. 

Finance ministers’ coyness on the matter is all the more significant given recent gatherings where public officials expressed concerns on the associated dangers. 

“Many countries borrowed a lot during the pandemic,” International Monetary Fund First Managing Director Gita Gopinath said at the World Economic Forum in Davos, Switzerland, in January. “That was short term in nature, and that’s coming due, so I think liquidity risks are something we should pay attention to.”

--With assistance from Maria Elena Vizcaino and Lucille Liu.

©2024 Bloomberg L.P.