The enormous ball of debt that countries have accumulated in recent years will continue to cause headaches.
The OECD (Organization for Economic Cooperation and Development) estimates that the ratio of liabilities to GDP in the bloc as a whole will not decrease this year, on the contrary, it will rise slightly from 83% to 84%.
Although the increase is not very marked, there are enormous differences between countries, with increases of up to three points in the United States and decreases of more than one in Japan, Portugal or Spain, which despite having a high debt of 107.7% of the GDP in 2023 does not appear in the snapshot among the worst-off economies.
The agency also predicts that rate increases will take their toll, with an increase in interest payments, and that sovereign debt issues will mark a new high due to the maturities that occur this year.
These conclusions are broken down in the
Global Debt Report 2024
that the organization published this Thursday, and which is the first annual report it prepares on the sovereign and corporate debts of the club's members.
In this it draws the trajectory that the liabilities of States and companies have had from 2008 to today, a period in which the economy has experienced different stages of stress and monetary policies have taken 180 degree turns.
At the end of 2023, the bloc's public debt amounted to 54 trillion dollars (50 trillion euros), almost doubling the 2008 figure—30 million more.
The institution expects that in 2024 it will continue to grow and reach 56 billion, an amount in which the United States will have a significant specific weight: it accounts for nearly half of the total, double what it was three decades ago.
Corporate debt, for its part, grew from 21 to 34 trillion dollars in the same period.
More than 60% of this increase is accounted for by non-financial entities.
Together, sovereign and corporate debts accumulate around 100 trillion.
The arrival of the pandemic in 2020 promoted even more expansive monetary policies than those already in force, with rates at minimums and massive purchases of debt: the issuance of sovereign bonds in the OECD area reached a maximum of 15.4 trillion of dollars and the corporate ones the 6.9 billion.
The sudden reversal caused by rising inflation has however moderated these trends.
The positive side is that many governments and companies had already secured favorable financing conditions, for example by extending debt maturities, which is allowing them to postpone the short-term impact of rising rates.
However, the amount of obligations maturing in the next three years is “considerable” and “will significantly increase financial pressures, especially in emerging economies,” the report warns.
The pressure on future interest payments is linked above all to new loans and the refinancing of fixed-rate debt, which according to the agency will raise the bill by 0.5% in the bloc's economies in 2026.
Gross sovereign debt – new issues plus maturities –, on the other hand, will reach “a historical maximum” in 2024 in the OECD area, above pandemic levels.
From 12.1 trillion dollars in 2022, it went to 14.1 trillion last year and is expected to reach 15.8 trillion this 2024, an increase of almost 45% in real terms compared to 2019. The bulk of the The increase comes from refinancing, which will stand at 12.6 billion compared to the average 7 per year before the pandemic.
The cost of new borrowing rose from 1% in 2021 to 4% in 2023, while interest expenses rose from 2.3% to 2.9% of GDP over the same period.
Global debt, at a maximum of 313 billion
Global debt added $15 trillion more last year and reached a record $313 trillion.
Nearly half of the increase corresponds to advanced economies, particularly the United States, France and Germany, according to the latest
Global Debt Monitor
from the Institute of International Finance (IIF).
In emerging countries, the main people responsible for the rebound have been China, India and Brazil.
Governments have seen the largest increases in terms of volume, followed by non-financial companies, which raised their liabilities to $244 trillion, well above pre-Covid levels.
The ratio of debt to global GDP, on the other hand, decreased by about two percentage points, but remains at very high levels: almost 330%.
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