Standard & Poor’s said today that global public debt is on an explosive path. It also mentions that aging populations and the cost of fighting the financial crisis erode government finances.
Debt ito 245% as percentage of GDP
Median net debt as a percentage of GDPin 49 economies (accounting for more than two-thirds of the world’s population) will rise to 245%by 2050. In 2007 the forecast of 148%.
That is what aging population and financial mismanamagent do.
Bloomberg reports: "Budget deficits and sovereign debt have ballooned worldwide after governments spent trillions of dollars in stimulus to revive growth. In Europe, mounting fiscal problems forced Greece to seek a European Union-led bailout in May, while Irish and Portuguese borrowing costs have soared on concern that they may also need aid".
"As aging populations drive up costs for pensions and other social services, increases in debt will likely lead to sovereign-rating downgrades unless governments change their fiscal policies, it said".
“Population aging will lead to profound changes in economic growth prospects for countries around the world,” S&P said in the report. “The erosion in sovereign ratings would start in 2015, when hypothetical ratings on a number of highly rated sovereigns come under pressure.”
Friday, October 8, 2010
Standards & Poors: Debt is In Explosive Path to 245% of GDP; Aging Population, Mismanagement
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