The world’s governments are about to face a day of reckoning for trillions of dollar of debt.
By 2026, a “maturity Wall” of debt which advanced economies will have to refinance is expected to descend.
Financial Times reports that the debt wall is expected to reach more than 33 trillion dollars by the time refinancing becomes necessary.
This represents an increase of nearly 20% in the debt refinancing requirements for the year and three times more than the capital expenditures required by the respective countries.
It is likely that the debt wall will have to be refinanced in a very short period of time, and at increased interest rates. This means policymakers must pay close attention to their liquidity management, as well as maintaining financial stability.
As the deadline nears, nations are injecting money into the system.
The FT reports that global liquidity has risen by $16.1 trillion over the past 12 months, and by $5.9 trillion from the end of last June as central banks ease interest rates.
As the International Monetary Fund warns of rising debt, the new figures are released.
IMF estimates that global debt is expected to exceed $100 trillion this year. This represents 93% of the global GDP.
Sources of Images include Pixabay Creative Commons & Midjourney
The report may change as new information becomes available.
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