Reducing debt levels accumulated through the financial crisis will be tough—but there remain reasons for optimismby Vicky Pryce / February 28, 2018 / Leave a comment
Debt is rocketing across the globe financed by record cheap credit.
Public debt owed by OECD countries has risen from $25 trillion in 2008 to some $45 trillion now, prompting the organisation to sound a warning last week.
In the eurozone total public sector debt rose from around 60 per cent of GDP before the financial crisis to near 95 per cent a couple of years ago, and though it has now come down to just under 90 per cent that still represents a substantial deterioration of many trillions of dollars in a decade. Spain, one of the fastest growing countries in the EU, has seen debt rise to 100 per cent of GDP. Portugal’s debt amounts to 130 per cent of GDP, Italy’s 137 per cent and Greece’s a whopping 188 per cent.
In China, not a full OECD member, overall debt private and public has reached some 257 per cent of GDP. With the country now embarking on what looks like serious fiscal relaxation, debt is forecast to exceed 300 per cent of GDP by 2020.