Covid debt projections surge
October 29, 2020 - Unprecedented state and corporate borrowing to survive the Covid pandemic could push world debt up 14% to 265% of GDP by year-end, according to credit rating agency S&P Global Ratings.
That level of outstanding government, corporate and household debt is almost triple the total goods and services the entire planet produces. S&P Global Ratings projects worldwide leverage to rise to US$200 trillion in 2020.
Alarming as these numbers are, a debt crisis is unlikely in the short term, according to S&P Global Ratings head of research Alexandra Dimitrijevic.
“This is based on our assumption of a continuing, albeit choppy, global economic recovery,” she told Bloomberg News.
“The recovery, in turn, is predicated on the wide availability of a Covid-19 vaccine by mid-2021, continuing accommodative financing conditions supported by monetary policies from major central banks, and the return of private-sector demand,” Dimitrijevic added.
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