Life After COVID: The Debt Tsunami That’s About To Hit The World - News Summed Up

Life After COVID: The Debt Tsunami That’s About To Hit The World


Making matters worse is the fact that governments in the developed world had allowed their debts to rise in the decade after the global financial crisis despite record-low interest rates. Though estimates vary, the massive government spending since the Covid-19 outbreak will increase these debt loads even further. Instead, it was through a combination of solid growth, moderate inflation and low interest rates that the debt to GDP ratio was steadily reduced. By the mid-1970s, government debt to GDP ratio had dropped to roughly 20%, a comfortable level that does no harm to the economy. To achieve sustained economic growth, moderate inflation and low interest rates in the wake of Covid-19, the world will need a recovery in global trade and investment.


Source: Forbes July 13, 2020 02:48 UTC



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