Big economies croak under $8-trilion debt - Hindustan Times
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Big economies croak under $8-trilion debt

ByKeith Jenkins and Anchalee Worrachate, London
Jan 04, 2012 09:50 PM IST

Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

Governments of the world’s leading economies have more than $7.6 trillion of debt maturing this year, with most facing a rise in borrowing costs.

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Led by Japan’s $3 trillion and the US’s $2.8 trillion, the amount coming due for the G-7 nations and Brazil, Russia, India and China is up from $7.4 trillion at this time last year, according to data compiled by Bloomberg. Ten-year bond yields will be higher by year-end for at least seven of the countries, forecasts show.

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Investors may demand higher compensation to lend to countries that struggle to finance increasing debt burdens, surveys show. The IMF cut its forecast for growth this year to 4% from a prior estimate of 4.5% as Europe’s debt crisis spreads, the US struggles to reduce a budget deficit exceeding $1 trillion and China’s property market cools.

The amount needing to be refinanced rises to more than $8 trillion when interest payments are included.

Borrowing costs for G-7 nations will rise by as much as 39% in 2011, based on forecasts. China’s 10-year yields may remain little changed, while India’s are projected to fall to 8.02% from 8.39%.

After Italy, France has most amount of debt, at $367 billion, followed by Germany at $285 billion. Canada has $221 billion, while Brazil has $169 billion, Britain has $165 billion, China has $121 billion, India $57 billion and Russia has $13 billion.


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