BAKU, Azerbaijan, July 7
By Fidan Babayeva – Trend:
Fitch Ratings forecasts global fiscal balances will sum to a deficit of $9.7 trillion this year (12 percent of GDP) and debt will reach $76 trillion (95 percent of GDP), Trend reports on July 7 referring to Fitch Ratings.
"A unique feature of the current fiscal response is the massive surge in government spending, which is concentrated in the advanced economies," Fitch Ratings said. "Normally, the directional change in nominal government spending matches that of nominal GDP growth, but nominal GDP is forecast to contract by nearly six percent in 2020 while spending will increase by about $3 trillion."
"The sum of world fiscal balances in 2019 was a deficit eight times larger than 2007 in nominal terms, at $2.8 trillion," Fitch Ratings said. "Global government debt last year was $68 trillion."
"It is too soon to conclude definitively that the current global recession and public spending related to coronavirus will result in a lasting increase in government debt, but the balance of risks points in that direction," Fitch Ratings said. "Past post-recession trends, the depth of the current fiscal deterioration and some of the pre-coronavirus policy debates together imply government debt is likely to remain high through the medium term."
(1 USD = 1.7 AZN on July 7)
----
Follow the author on Twitter: Fidan_Babaeva