But how big an issue is it really? This article looks at which countries are most at risk, why high public debt is a concern and the implications for investors.
- A global blowout in public debt has been a key outcome from the global financial crisis. Aging populations are also adding to deficit pressures.
- Debt crises in peripheral countries, such as Greece and Dubai, probably aren't enough to create a major global problem and default is very unlikely in key advanced countries, such as the US, UK and Japan. However, high public sector debt and measures to deal with it will act as a significant medium-term constraint on growth in advanced countries.
- Fortunately, emerging countries generally have low public debt levels, as do Australia and New Zealand.
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