1 week ago

Geopolitical Trade Disruptions Raise Global Debt Crisis Risks

Governments around the world have borrowed a great deal of money.

Global debt could become about as large as the world’s yearly economic output by 2029.

Borrowing is now more expensive because interest rates and bond yields are high.

This makes it harder for governments to pay old debts and fund public services.

Wars, trade problems and protectionism are also making economies less stable.

Central banks are struggling to control inflation while supporting economic growth.

India could face money leaving the country, pressure on its currency and slower growth.

Stronger economic growth and careful government spending could help prevent a larger debt crisis.

Key facts

Projected global debt: Around 100% of global GDP by 2029.
Pandemic-era debt: Global debt reached nearly 97% of GDP during the pandemic after extensive fiscal stimulus, social spending and subsidies.
United States long-term bond yields: Averaging close to 5%, according to the article.
Japan’s debt: Close to 250% of GDP.
Major contributors: The United States is a major advanced-economy contributor; China is a major emerging-market contributor.
India’s exposure: Higher global bond yields could trigger capital outflows and currency pressure, while weaker global demand could hurt growth.
Potential fiscal effects: Governments may curtail social welfare and climate spending or raise taxes.

deccanchronicle.com · 1 week ago