Latest topics
World record debt of $199trn could drag economies into another crisis - study
2 posters
Page 1 of 1
World record debt of $199trn could drag economies into another crisis - study
Global debt has soared by $57 trillion since the outbreak of the financial crisis in 2007, with the debt to GDP ratio jumping to above 500 percent in Japan. This raises questions about financial stability and poses a threat of another crisis.
“After the 2008 financial crisis and the longest and deepest global recession since World War II, it was widely expected that the world’s economies would deleverage. It has not happened. Instead, debt continues to grow in nearly all countries, in both absolute terms and relative to GDP. This creates fresh risks in some countries and limits growth prospects in many,” according to new research carried out by consultants McKinsey in 47 countries.
The amount of world debt reached $199 trillion at the end of 2014, with the growth rate exceeding the pace of global economic expansion and the debt to GDP ratio increased from 269 to 286 percent.
“Higher levels of debt pose questions about financial stability and whether some countries face the risk of a crisis.”
Source: Debt and (not much) deleveraging, McKinsey Global Institute
Source: Debt and (not much) deleveraging, McKinsey Global Institute
“We conclude that, absent additional steps and new approaches, business leaders should expect that debt will be a drag on GDP growth and continue to create volatility and fragility in financial markets,”the McKinsey report says.
Deleveraging remains limited to a handful of sectors in some countries. The only countries that managed to cut their debt were Argentina, Romania, Egypt, Saudi Arabia and Israel.
Geographically, Ireland was the country where the debt to GDP ratio saw a record increase – of 172 percent. The ratio in Japan added 64 percent and remains the world’s highest at 400 percent. In Russia, the debt to GDP ratio saw a moderate growth by 19 percent, remaining relatively low at 65 percent.
Source: Debt and (not much) deleveraging, McKinsey Global Institute
Source: Debt and (not much) deleveraging, McKinsey Global Institute
China is one of the key concerns as debt there has skyrocketed almost quadrupling, from $7.4 trillion in 2007 to $28.2 trillion in mid-2014. The debt-to-GDP ratio reached 282 percent comparing to 269 percent of the US. Although total Chinese debt is still manageable, experts are concerned with worrisome levels of debt in the property sector and the rapid expansion of shadow banking.
“China’s total debt, as a percentage of GDP, now exceeds that of the United States.”
Falling debt in the financial sector and a retreat in many of the riskiest forms of shadow banking are the only bright spots in the report. But the overall global debt burden “has reached new levels despite the pain of the financial crisis,” the report said.
Households across the world have also significantly increased their debt, with their debt relative to income having decreased in only five advanced economies - the United States, Ireland, the United Kingdom, Spain, and Germany. In such developed countries as Australia, Canada, Denmark, Sweden and the Netherlands, as well as Malaysia, South Korea and Thailand, the debt exceeds the pre-crisis level.
To avoid another crisis, the governments might take recourse to new ways of reducing the national debt such as larger sales of assets, non-recurrent wealth taxes and more effective programs of debt restructuring, the report said.
“Policy makers will need to consider a full range of responses to reduce debt as well as innovations to make debt less risky and make the impact of a future crisis less catastrophic.”
2015-02-07
http://rt.com/business/229883-world-debt-sharp-increase/
Ponee- Admin
- Posts : 38267
Join date : 2011-08-09
Re: World record debt of $199trn could drag economies into another crisis - study
As I have been saying, China is not the economic juggernaut the gurus and NESARA types claim. In reality, as I have said before, they are in worse economic shape that the US. Perhaps even worse, as their economy is heavily dependent upon exports to the US, while the US economy is not dependent upon any one country.China is one of the key concerns as debt there has skyrocketed almost quadrupling, from $7.4 trillion in 2007 to $28.2 trillion in mid-2014. The debt-to-GDP ratio reached 282 percent comparing to 269 percent of the US.
*****************
Trust but Verify --- R Reagan
"Rejoice always, pray without ceasing, in everything give thanks; for this is the will of God in Christ Jesus for you."1 Thessalonians 5:14–18
Kevind53- Super Moderator
- Posts : 27254
Join date : 2011-08-09
Age : 24
Location : Umm right here!
Page 1 of 1
Permissions in this forum:
You cannot reply to topics in this forum
Sun Mar 10, 2024 5:58 am by RamblerNash
» CBD Vape Cartridges
Thu Mar 07, 2024 2:10 pm by Arendac
» Classic Tony is back
Tue Mar 05, 2024 2:53 pm by Mission1st
» THE MUSINGS OF A MADMAN
Mon Mar 04, 2024 11:40 am by Arendac
» Minister of Transport: We do not have authority over any airport in Iraq
Mon Mar 04, 2024 11:40 am by Verina
» Did Okie Die?
Mon Mar 04, 2024 11:34 am by Arendac
» Hello all, I’m new
Wed Jan 31, 2024 8:46 pm by Jonny_5
» The Renfrows: Prophets for Profits, Happy Anniversary!
Wed Jan 31, 2024 6:46 pm by Mission1st
» What Happens when Cancer is treated with Cannabis? VIDEO
Wed Jan 31, 2024 8:58 am by MadisonParrish
» An Awesome talk between Tucker and Russell Brand
Wed Jan 31, 2024 12:16 am by kenlej
» Trafficking in children
Mon Jan 29, 2024 7:43 pm by kenlej
» The second American Revolution has begun, God Bless Texas
Mon Jan 29, 2024 6:13 pm by kenlej
» The Global Currency Reset Evolution Event Will Begin With Gold, Zimbabwe ZWR Old Bank Notes
Sun Jan 28, 2024 3:28 pm by Mission1st
» Tucker talking Canada
Wed Jan 24, 2024 6:50 pm by kenlej
» Almost to the end The goodguys are winning
Mon Jan 22, 2024 9:03 pm by kenlej
» Dinar Daily Facebook Page
Mon Jan 22, 2024 3:34 pm by Ponee
» The Fundamentals of Finance and Pimpy Live
Thu Jan 18, 2024 7:17 am by Dinarhater
» Why Won't the Iraqi Dinar Scam Die?
Wed Jan 17, 2024 5:19 pm by RamblerNash
» Frat President Charged With Stealing $267K to Buy Worthless Iraqi Dinars
Wed Jan 17, 2024 5:05 pm by RamblerNash
» Fact Check: NO Record 'Quantum Financial System' Exists Beyond Claims In Videos, Online Articles
Mon Jan 15, 2024 6:15 pm by RamblerNash