Financial Times (December 10)
“Global public debt is set to exceed $100tn by the end of this year” according to IMF estimates, “with total government borrowing set to approach 100 per cent of global GDP by the end of the decade.” This development led the outgoing chief economist of the Bank for International Settlements to warn that “rising government debt levels will cause turbulence in the global economy and financial markets unless political leaders start tackling them soon.”
Tags: $100tn, BIS, Borrowing, Chief economist, Debt levels, Economy, Financial markets, GDP, Global, Government, IMF, Political leaders, Public debt, Turbulence
The Independent (November 21)
“The latest public sector borrowing figures are enough to have anyone inside 11 Downing Street heading for the drinks cabinet. The total came to £17.4bn in October; that’s £1.6bn more than this time last year, £5bn higher than City forecasts, and…. worryingly close to the £18.2bn recorded in October 2020, during the height of the pandemic.” All of this suggests “more tax rises could be on the way.”
Tags: £17.4bn, 2020, Borrowing, Downing Street, October, Pandemic, Public sector, Tax rises
Wall Street Journal (February 17)
“Treasury yields have sprung to multiyear highs, forcing the U.S. government to pay a lot more in interest and putting pressure on the budget.” Over the new decade, federal interest costs are now expected to rise by $1.1 trillion, reviving “Wall Street worries that the years-long acceleration in borrowing under both political parties will eventually weigh on economic growth and asset prices.”
Tags: $1.1 trillion, Asset prices, Borrowing, Budget, Costs, Economic growth, Interest, Pressure, Treasuries, U.S. Government, Wall Street, Worries, Yields
Washington Post (January 25)
“The nation’s economy was supposed to have sunk into recession by now, dragged down by the highest interest rates in two decades and a resulting slump in borrowing and spending. Instead, the U.S. economy has kept chugging along. Even more encouraging, inflation, which touched a four-decade high in 2022, has edged steadily lower without the painful layoffs that most economists had thought would be necessary to slow the acceleration of prices.”
Tags: Acceleration, Borrowing, Economists, Economy, Encouraging, Inflation, Interest rates, Layoffs, Painful, Recession, Slump, Spending, U.S.
The Economist (June 4)
“For the past two years Recep Tayyip Erdogan, Turkey’s president, has pursued a zany policy of trying to bring down inflation by making borrowing cheaper. It is precisely the opposite of what any mainstream economist would advise, and it was never going to work.” His new cabinet “includes Mehmet Simsek, a voice of economic orthodoxy.” The new treasury and finance minister has said “Turkey has no choice left but to return to a rational basis” for policymaking. “Such words will be music to the ears of many foreign investors, who have given up on Turkey over the past couple of years. But they will not count for much unless they are backed up by concrete steps to fix the country’s economy.”
Tags: Borrowing, Cabinet, Cheaper, Economist, Erdogan, Finance Minister, Inflation, Mainstream, Orthodoxy, Policy, Rational, Simsek, Treasury, Turkey
Houston Chronicle (June 17)
“U.S. mortgage rates had their biggest one-week jump in 35 years…. The 30-year rate climbed from 5.23% last week to 5.78% this week, the highest its been since November of 2008 during the housing crisis.” This is likely to accelerate the trend as higher borrowing rates have already been cooling the housing market. “Sales of previously occupied U.S. homes slowed for the third consecutive month in April as mortgage rates surged, driving up borrowing costs for would-be buyers as home prices soared.”
Tags: 2008, 30-year rate, 5.78%, Borrowing, Buyers, Home prices, Housing crisis, Jump, Mortgage rates, Sales, Soared, U.S.
Wall Street Journal (August 23)
The Government of Japan “is already on the hook to pay out nearly $10 trillion to its creditors.” This may appear *an impossibly large sum to rustle up” when annual tax collections amount to “less than $600 billion.” But today’s “economists talk more about the risk of issuing too little debt” and the U.S. may soon follow Japan’s lead. “Congress is debating trillions of dollars more in proposed spending that would push America’s borrowing toward levels policy makers in Tokyo have long embraced.”
Tags: $10 trillion, Borrowing, Congress, Creditors, Debt, Economists, Government, Japan, Risk, Spending, Tax collections, U.S.
Financial Times (September 13)
Mario Draghi and the ECB have done their part, but “Germany will wait until it is too late before providing a measurable fiscal stimulus.” This is the optimal “time for Europe to invest in its future,” with low inflation, zero cost of borrowing and fiscal surpluses. “German leaders know this,” but fear alarming “the good burghers of Munich, Hamburg and Frankfurt. Were recession to provoke a full-blown euro-zone crisis, Berlin would of course act…. But do not expect Germany to dispatch the fire brigade before the flames have fully taken hold. What a waste.”
Tags: Borrowing, Crisis, Draghi, ECB, Euro zone, Fiscal stimulus, Germany, Inflation, Recession, Surpluses
The Guardian (August 9)
“The era of low interest rates will last for at least another 20 years, despite gently rising official borrowing costs in the coming years, one of the Bank of England’s leading policymakers has forecast.” Outgoing monetary policy committee (MPC) member Ian McCafferty said that “structural changes in the global economy meant UK borrowers and savers should get used to interest rates being “significantly” below the 5% average in the 10 years leading up to the financial crisis.”
Tags: BOE, Borrowing, Costs, Era, Financial Crisis, Global economy, Interest rates, Low, MPC, Structural changes, UK
CNBC (October 6)
“The world is awash with $152 trillion dollars of debt, according to the IMF, an all-time high which sits at more than double the balance at the start of this century.” In 2002, debt represented 200% of global GDP. At the end of 2015, this figure had risen to 225% and “signifies the extent to which increases in borrowing have outpaced economic growth during the period.”
Tags: Borrowing, Debt, Economic growth, GDP, IMF
