The OECD warns of “disconnect” between corporate debt and investment since 2008.

Borrowing by corporates has far exceeded their productive investments since the global financial crisis (GFC), according to an OECD analysis, highlighting the challenge to boost gross domestic product growth and shift to a lower-carbon economy.

“Having used the low-rate era to prioritise financial operations, the link between corporate investment and borrowing has been partly severed,” read the OECD’s Global Debt report published.

Between 2009 and 2023, global cumulative bond issuance by non-financial companies was $12.9tn more than it would have been if it followed the pre-2008 trend. Over the same period, global corporate investment was $8.4tn lower than the trend. This ‘investment’ was for corporate bonds where the stated use was either working capital, highways, capital expenditure, research and development or renewable energy.

High public debt levels are also of growing concern. The share of greenfield FDI in overall private sector investment would need to triple by 2035 for governments to stay within their debt limits, according to OECD model of a private capital markets financed energy transition.

“As governments and corporates seek to meet rising investment needs, in particular in the energy sector, they must navigate an environment shaped by slowing economic growth, heightened geopolitical risk and competing priorities for public and private funding,” wrote Carmine Di Noia, the OECD’s director for financial and enterprise affairs, in a foreword.