2024-02-12 08:56:48
Over the next ten years, the world faces a prolonged debt crisis, which could be fatal for some countries.
As Day.Az reports with reference to Lenta.ru, Arthur Laffer, president of the investment and wealth consulting company Laffer Tengler Investments, spoke about this in an interview with CNBC.
The economist recalled that in September 2023, global debt reached a record high of $307.4 trillion, while global debt has increased by $100 trillion since 2013. “The next ten years will be the decade of debt, debt is at its peak all over the world. This is not going to end well,” Laffer predicted.
Global debt has now risen to 336 percent of global GDP. According to International Monetary Fund estimates, to reduce it, about 100 countries will be forced to cut their spending on health, education and other social needs.
Those states that manage to improve their financial position will benefit from attracting workers and investment from abroad, while less fortunate countries will lose income and labor, Laffer predicted. He said that some developing economies could go bankrupt, and some large countries that do not resolve their debt issues will face a “slow financial death.”
Developed markets such as the US, UK, Japan and France accounted for more than 80 percent of debt growth in the first half of 2023. Among emerging markets, the most notable growth was observed in China, India and Brazil. “There are two main ways to solve this problem: raise taxes or grow the economy faster than the debt accumulates,” Laffer said.
Budget deficits and rising national debt could lead the United States into a “death spiral,” said Nassim Taleb, an economist, trader and best-selling author of “The Black Swan.” In his opinion, the shortage of money in the federal treasury is growing at such a rate that it will take a miracle for the country to reverse the damage.
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