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….. were piling up around the world already before Corona. These mountains of public debt and corporate debt will only rise during this crisis, and by a lot, leading to severe problems in many countries but, with reasonable management, not here.
Below, a few numbers, a few links and some relevance for Latvia.
a) Government debt: Rapidly rising everywhere due to 1) massively increased spending in countries to counter the effects of lockdowns etc. and 2) off-the-cliff-falling tax revenues due to severely limited economic activity in so many sectors of the economies. Check e.g. The Economist’s debt clock for a rather scary picture. Figure 1 lists government debt as per cent of GDP for 2019 among the advanced economies. Latvia is well-positioned at the lower end; the debt ratio will rise substantially this year but will remain manageable as is also seen by the low interest rates at which Latvia can borrow.
