The debt burden – particularly in “developed” countries – along with ageing populations pose a risk to the economies of those countries, Goldman Sachs has warned.
Andrew Wilson, Goldman Sachs Asset Management’s chief executive in Europe said, “There is too much debt and this represents a risk to economies.
Consequently, there is a clear need to generate growth to work that debt off but, as demographics change, new ways of thinking at a policy level are required to do this.”
Japan, as an example of a major economy, now has a government debt-to-GDP ratio of over 200%, which Wilson says is “not sustainable over the long term.” Other countries with very high debt loads include the U.S., most of Europe and Brazil.
Among those countries on the other end of the scale are Russia, other central Asian countries and most of the Gulf states demonstrating the latent and as yet widely unacknowledged strength of the emerging Eurasian Economic Union and its ties to the Chinese New Silk Road project.
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