Debt of rich countries remains at high levels

Noam Stiekema

The debt of rich countries has stabilized, but remains near historically high levels and can also increase due to uncertainly economic recovery, warns the International Monetary Fund (IMF) in its six-month report. “The budget efforts over the last five years stabilized the ratio of government debt to gross domestic product (GDP), although it remains at […]

IMF

IMFThe debt of rich countries has stabilized, but remains near historically high levels and can also increase due to uncertainly economic recovery, warns the International Monetary Fund (IMF) in its six-month report. “The budget efforts over the last five years stabilized the ratio of government debt to gross domestic product (GDP), although it remains at a high level”, says the fund in official report.

The average public debt of rich countries is expected to grow slightly (0.3 points) to reach 106.5 percent of GDP this year and then shrink in 2015 to 106%. The IMF noted that the pressure on public finances fell amid low interest rates in rich countries, but risks remain high due to historically high debt ratios and weak recovery, along with the future costs of pensions and salaries.

It is expected Japan again to remain at the forefront of debt from 245.1% of GDP in 2014, followed by Greece (174.2%) and Italy (136.7%). The burden of debt in rich countries can grow in developed countries in the event of continued low inflation permanently. The Fund emphasizes that after years of austerity, the population “is supersaturated” reforms and the need for prudent fiscal policies combine sustainability of public finances and growth.

In emerging market economies debt remains generally moderate, but below levels from before the financial crisis in 2008-2009. This year the debt/GDP ratio should reach only 49.7% in China, 60.5% in India and 15.7% in Russia, the report said. Imminent increase in interest rates in the world can complicate the situation in these countries and occur more difficult times.

Read this next

Retail FX

Prop firm The Funded Trader shuts down, claims relaunch in April

Prop trading firm The Funded Trader has ceased all operations, with claims for a relaunch in the near future.

Digital Assets

Ethereum-Based Tokenized Real Estate Platform USP Launches On Republic

How This Californian Startup Is Revolutionizing Real Estate Investment through Ethereum-Based Tokenization.

Digital Assets

Sui Spikes in Weekly DEX Volume, Joins Top 10 of All Blockchains

March DEX volume on Sui stands at over $2.88B – up more than 49% from February – with decentralized exchange Cetus and wholesale liquidity layer DeepBook leading.

Digital Assets

Prisma Finance suffers $10 million crypto exploit, attack ongoing

Liquid staking protocol Prisma Finance fell victim to a security exploit on March 28, resulting in nearly $10 million in Prisma mkUSD and wrapped stETH being stolen by hackers.

Digital Assets

Masa and LayerZero: Bridging Blockchains for Data Sovereignty

Masa Network is poised to revolutionize the personal data landscape with its upcoming launch as a cross-chain platform, making it accessible on a variety of blockchains right from the start.

Digital Assets

Big Time Generates over $100M in Revenue since Preseason

Innovative game developer Big Time Studios announces that its highly anticipated free-to-play multiplayer action/MMO RPG Big Time, has generated $100M in revenue. According to the team, players transacted a total volume of over $230M, without selling a single token.

Digital Assets

Centralized exchanges are 10 times more popular than DEXs in Western Europe

Western European traders are found to prefer centralized exchanges over decentralized ones as CEX traffic outpaces DEXs by a factor of ten.

Market News

Stock Market Analysis: Is NVDA Losing Its Leadership?

Since the beginning of the week, the S&P 500 Index (US500) has seen a modest increase of about 0.58%, whereas NVDA’s share price has experienced a decline of approximately 3.8%. This recent divergence raises concerns among Nvidia stock investors — could it signify a loss of NVDA’s market leadership?

Industry News

ESG: Australian regulator wins first greenwashing court case against Vanguard

Vanguard admitted that a notable portion of the securities within both the Index and the Fund did not undergo the promised ESG scrutiny.

<