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Moderate debt in Switzerland compared to international

Zurich (awp) – Switzerland’s public debt, although a large increase last year, is still relatively international. So Switzerland is the only country in the index whose debt has not reached record levels, British asset manager Janus Henderson said in a study on Wednesday.

Up 7.8% to $ 65.4 trillion in 2021, global public debt recorded a sharp rise last year: compared to the pre – pandemic period, debt increased by more than 25%. And no change in the trend is expected, although forecasts for 2022 are counting on a new jump of 9.5%, to 71.6 trillion dollars, a figure never seen before.

The increase in debt was driven by the increase in loans from all countries, Janus Henderson’s annual sovereign debt index shows. China is the country with its fastest growing and strongest debt in terms of liquidity, with a one – fifth increase. Among the major developed economies, Germany experienced the largest percentage increase, with its borrowing increasing by 14.7%.

However, the cost of servicing debt has fallen to an all-time low of $ 1.01 trillion, or an effective interest rate of just 1.6%, from 1.8% in 2020. “With the strong economic recovery, global debt is up However, the GDP ratio improved from 87.5% in 2020 to 80.7% in 2021, “the report said.

Swiss debt on the rise, but below its record

Adjusted for currency effects, Switzerland’s debt increased by 13.8% in 2021, much faster than the average, and amounted to $ 234 billion, a figure below the unprecedented amount of 240 billion recorded in 2004.

Thanks to Switzerland’s ultra-low interest rates, the cost of servicing these loans was $ 880 million in 2021, less than a fifth of the interest cost recorded when the loans reached similar levels in 2004.

The overall yield on Swiss bonds between the end of January 2021 and 2022 was -4.7%, one of the worst in Europe, the study authors said.

The increase in global public debt in 2022 will be largely driven by the United States, Japan and China, although most other countries are also expected to borrow more. The burden on taxpayers is expected to increase sharply, due to rising interest rates in many economies.

ol / jh

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