Saturday November 28, 2020

Analysis: A world debt crisis is not imminent, despite Covid-19

How the new debt taken on by governments is used will be a key factor determining the global economic recovery from the pandemic

28th October, 2020
The short-term outlook remains worrying, particularly for borrowers at the lower end of the credit scale or in vulnerable industries, but a large-scale debt crisis may not be nearly as likely as many fear. Picture: Getty

As countries, companies and households confront the Covid-19 pandemic’s economic fallout, many market watchers are sounding the alarm about rapidly rising leverage worldwide.

And for good reason: in an acceleration of a years-long trend, the debt-to-GDP ratio among these three sets of borrowers is set to swell by 14 per cent this year, to a record 265 per cent.

But while this has raised the risk of insolvencies and defaults, particularly among corporations, S&P Global...

Subscribe from just €1 for the first month!

Exclusive offers:

All Digital Access + eReader



Unlimited Access for 1 Month

Then €19.99 a month after the offer period.

Get basic
*New subscribers only
You can cancel any time.



€149 For the 1st Year

Unlimited Access for 1 Year

You can cancel any time.




90 Day Pass

You can cancel any time.

2 Yearly



Unlimited Access for 2 Years

This product does not auto-renew

Team Pass

Get a Business Account for you and your team

Related Stories

With very little of the €2 billion credit guarantee cash having found its way to stricken companies, some are speculating that the banks are too busy dealing with underperforming loans to lend cash to firms

Ian Guider | 1 week ago

Analysis: Michael O’Leary must be unhappy that he can’t run his company in his own way during the pandemic. His is the personality that made Ryanair Ireland’s most successful export, but he faces his biggest challenge yet in bringing the company back to recovery

Ian Guider | 2 weeks ago

Comment: Can Ireland retain the investment already won if there are US tax policy changes under a Biden presidency?

Brian Keegan | 3 weeks ago