HomeFinance NewsEconomyDebt Avalanche: Countries Facing Fiscal Doom in the Coming Decade

Debt Avalanche: Countries Facing Fiscal Doom in the Coming Decade


‘A slow fiscal death’ awaits some countries in this ‘decade of debt,’ says economist Arthur Laffer


A looming debt crisis spanning the next decade awaits the world, warned economist Arthur Laffer.

An unprecedented $307.4 trillion global debt was recorded.

A 100% increase in debt over the past ten years, primarily due to high-interest rates.

This has led to a 336% debt-to-GDP ratio, significantly higher than 2012’s 110% for advanced economies and 35% for emerging economies.

Debt payments might require 100 countries to reduce spending on vital social infrastructure, such as healthcare, education, and protection.

Some countries that successfully improve their fiscal situations could attract labor, capital, and investment from abroad.

Mature markets like the U.S., U.K., Japan, and France were responsible for more than 80% of the debt build-up.

China, India, and Brazil saw notable increases among emerging economies.

Arthur Laffer warned this debt repayment issue will worsen as developed countries’ populations age and workforces dwindle, leaving raising taxes or growing the economy faster as the remedies.

Laffer made these statements in light of the U.S. Federal Reserve’s decision to leave rates unchanged in January, quashing hopes of a March rate cut.

  • Overall sentiment: negative
  • Positive


    “The world is looking at a debt crisis that will span the next 10 years and it’s not going to end well.”

    “I predict that the next 10 years will be the Decade of Debt. Debt globally is coming to a head. It will not end well.”

    “It is estimated that around 100 countries will have to cut spending on critical social infrastructure including health, education and social protection.”

    “I would expect that some of the bigger countries that don’t address their debt issues will die a slow fiscal death.”

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