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The world is awash with debt
Jul 1, 2015


Since the onset of the global financial crisis in 2008, large central banks and governments around the world have taken the easy route to recovery. Starting from the qualitative easing program by the US Fed, followed by the bailout packages in the Euro zone and huge stimulus packages by Japan and China, all the measures of pumping money have failed to rein in the slowdown. On the contrary, such unbridled money printing has led to a steep jump in the debt levels of these economies.

Recently, Greece whose debt levels stand at a whopping 300% of GDP, defaulted on its Euro 1.6 bn loan repayment to the IMF. This default, a first by a developed economy, has raised fears of Greece's exit from the 19-nation euro common currency. The ballooning debt levels and near zero interest rates in most advanced economies have put a question mark on the monetary measures available in future if the global recovery falters. India, on the other hand, has been conservative in cutting interest rates to spur the economy. This is also reflected in its debt levels which stand just below 120% of GDP.

Data Source: RBI, BIS, IMF

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