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CRS – Sovereign Debt in Advanced Economies

Sovereign Debt in Advanced Economies:  Overview and Issues for Congress – Rebecca M. Nelson, Analyst in International Trade and Finance. October 28, 2013

“Sovereign debt, also called public debt or government debt, refers to debt incurred by governments. Since the global financial crisis of 2008-2009, public debt in advanced economies  has increased substantially. A number of factors related to the financial crisis have fueled the increase, including fiscal stimulus packages, the nationalization of private-sector debt, and lower tax revenue. Even if economic growth reverses some of these trends, such as by boosting tax  receipts and reducing spending on government programs, aging populations in advanced  economies are expected to strain government debt levels in coming years. High levels of debt in advanced economies arose as an issue for concern for some analysts  following the global financial crisis, after decades of attention on debt levels in developing and emerging markets. Four Eurozone countries, Greece, Ireland, Portugal, and Cyprus, have turned to the International Monetary Fund (IMF) and other European governments for financial  assistance. Some analysts and policymakers are also concerned about are also concerned about debt levels in other advanced economies.”

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