The global outlook: Public spending after COVID-19

While interest rates are low, a large stock of debt remains affordable – but even a small increase in rates could see the costs of servicing that debt spiral upwards, write Constance Hunter and Dennis Tatarkov.

One of the legacies of the COVID-19 pandemic could be a generational shift towards higher government spending, as fiscal policymakers adjust to the new reality of rising demands for government support while interest rates remain low. The shock of the COVID19 pandemic has pushed governments to increase spending to record levels, with over US$10 trillion being allocated around the world. Much of this effort has been financed by additional borrowing, adding to the already large debt piles that...

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Authors: Constance Hunter

Published Date: 16 March 2021