Public debt: every Argentine owes $8,604, 19% more than in 2019

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Argentina’s public debt arrived in 2022 a 392 billion dollarsamount equal to 85% of the gross product. This represents US$8,604 per capita and is expected to continue to grow until it reaches US$8,878 per person in 2025according to a report on world public debt by the Janus Henderson Group

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“In Argentina, public debt as a percentage of GDP is particularly high. It reached 85% in 2022, although it is projected to drop to 75% by 2025,” the report said.

The country’s sovereign debt rose another 20% last year to $392 billion. In 1995 it amounted to US$87,000 million and was equal to 31% of GDP.

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“Pre-pandemic data indicate that in 2019, per capita sovereign debt in Argentina was $7,219, total debt 323,000 million and the percentage to GDP peaked at over 90%. The projection towards 2025 estimates that total debt will rise to 411 billion dollars, which will account for 75% of GDP e $8,878 per capita”.

Globally, global public debt increased by 7.6% in 2022, with the United States responsible for more than half of the increase. By 2025, governments around the world will need to spend $2.80 trillion of interest, more than double compared to 2022.

Global national debts will continue to rise until they catch up $77.2 trillion in 2025.

“Governments around the world are facing a painful showdown, as record debt and high interest rates mean borrowing costs will double in the next three years. This will put significant pressure on taxpayers and services,” says Janus Henderson Group.

regional debt

In the area, Brazil is the third most indebted country in emerging markets and the eleventh in the world. Brazil’s general public debt increased by 4.7% in 2022 to $1.40 trillion, a slower increase than the global one which equates to US$6,542 per capita. Emerging market countries have increased their debt by 46% since 2019, second only to the United States.

In Colombia, sovereign debt increased by 11.8% year on year in 2022, reaching 199 billion dollars. The country’s debt-to-GDP ratio is 68%, higher than its emerging-market counterparts.

Chile must now 116 billion dollarswhich represents a year-over-year increase of 13% and accumulates an increase of 80% since 2019. Measured per person, Chile’s sovereign debt amounts to $5,919, while in Colombia it is $3,830 and in Mexico it reaches $5,769.

“After the global financial crisis, governments have borrowed with surprising freedom. Near-zero interest rates and huge central bank quantitative easing programs have expanded public debt, but bondholders are now demanding higher yields to compensate inflation and rising risks, and this is creating a significant and growing burden on taxpayers. Transitioning to more normal financial conditions is proving to be a painful process,” said Janus Henderson Global Head of Fixed Income Jim Cielinski.

Looking ahead, the prospects are not encouraging. In 2025, governments around the world will need to spend $2.80 trillion on interest, more than double the amount in 2022. This will mean an additional 1.2% of GDP, either by diverting resources from other forms of public spending or by demanding tax increases. The United States is particularly exposed to this measure.

Continuing yearly deficits mean that debts will keep increasing until they catch up $77.2 trillion in 2025. In this way, the global debt burden is projected to rise from the current 78% of GDP to 79% of GDP in 2025.

AQ

Source: Clarin

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