Tuesday, January 3, 2012

3/1/2012: Government debt - maturity v overhang

There are some good reports on the massive debt rollover in G7 and BRICs in 2012 - see a summary here. That can lead non-economists to confuse total outstanding Government debt with that maturing in 2012. Here's the summary of Government debt projections for G7 and BRICs for 2012 and 2016 based on September 2011 WEO database from the IMF.

So overall:

  • Back in September 2011, the IMF projected total G7 Government debt to reach US$43.02 trillion, or 123% of the expected 2012 GDP
  • BRICs 2012 Government debt is projected to reach US$4.9 trillion or 34% of GDP
  • Total G7+BRIC Government debt outstanding for 2012 is expected to be US$47.92 trillion or 97% of GDP
  • The above figures show why public debt in G7 nations is such a concern for the markets and the real economies.
  • By 2016, G7 Government debt is expected to rise to US$51.01 trillion or 127% of GDP. These projections are based on rather rosy assumptions that were built into September WEO forecasts and since then have been revised down, although there is no comprehensive database data incorporating these revisions available yet (it should come out in April 2012).
  • Absolute debt levels for G7 Governments are expected to rise for all countries except Canada and Germany. Relative to GDP, Government debt levels are expected to rise between 2012 and 2016 in Japan and the US.
So that US$ 7.6 trillion figure of maturing Government debt for G7+BRICs mentioned in the Bloomberg article linked above - that is just 15.9% of the total Government debt of these countries outstanding that matures in 2012. Not to be confused with the whole debt mountain...
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