As global debt worries mount, is another crisis brewing?

Reuters: The economies of the U.S., Italy and Britain are the biggest concerns right now, 20 economists, policymakers and investors said. They do not expect developed economies to struggle to pay down debt. But experts say governments need to come up with credible fiscal plans, raise taxes and boost growth to keep their financial health on track. Budget wrangling is undermining confidence in the U.S. by stripping it of its top AAA rating. Ray Dalio of hedge fund Bridgewater Associates expects a U.S. debt crisis. Italy’s €2.4 trillion debt is in the spotlight in Europe. There, the IMF believes the large government debt makes the country vulnerable to crises. The Moody’s agency rates the investment rating one notch above “junk” with a negative outlook. A re-rating of Rome’s debt burden is likely to lead to a downgrade. In the UK, US and Italy, debt is close to or exceeds 100% of output. An aging population, climate change and geopolitical risks such as wars in Ukraine and the Middle East mean significant cost pressures. Additional pressure comes from interest payments rising in a high interest rate environment.

The entire article can be read at the link https://www.reuters.com/markets/global-debt-worries-mount-is-another-crisis-brewing-2023-10-16/