Posted on Jan 18, 2021 at 7:09 am
The Covid-19 crisis has accelerated changes in the economy and accentuated inequalities. This is also true of public debt. State debt around the world exploded by $ 10,000 billion in 2020, and mostly over 9 months, according to Fitch Ratings. Before the pandemic, it had taken seven years (between 2012 and 2019) to swell the stock of global debt to such proportions. The result: unprecedented and vertiginous public debt of 77.8 trillion dollars, or almost a year (94%) of production of global wealth.
However, this swelling of the debt, everywhere necessary to compensate for the collapse of activity, does not have the same consequences for the developed economies and for the emerging countries. For the former, despite the increase in public debt, the interest charge has not increased. It even fell, thanks to the extraordinary support provided by central banks, the fall in bond yields offsetting the swelling of the stock of debt. For the coming years, the United States, Germany, Japan and France, which obtained funding at negative rates in 2020, should not encounter any difficulty in obtaining funding on the markets.