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People's Daily Online>>World

World major economies face $7.6 trillion debt

By Shen Yanqi (Beijing Daily)

17:03, January 05, 2012

Edited and translated by People's Daily Online

At the very beginning of 2012, the world’s major economies have suffered from a heavy debt as high as 7.6 trillion U.S. dollars.

The total debt coming due this year for G7 and Brazil, Russia, India and China has increased from 7.4 trillion U.S. dollars of last year to over 7.6 trillion U.S. dollars.

According to Bloomberg, Japan and the United States come out top among the debt scale of the world's major economies. Japan has a debt of 3 trillion U.S. dollars coming due and the United States 2.8 trillion U.S. dollars.

It is reported that the 10-year bond yields of at least seven countries will be higher till the end of the year. With the slowdown in the global economic growth, the investors may require a higher rate of return for funds, which means that most debtor nations will be faced with the dilemma of increased borrowing costs.

Under the shadow of such a huge amount of debt, International Monetary Fund (IMF) has lowered the projected economic growth this year from 4.5 percent to 4 percent.

“The money supply will be a cause for concern which will be prominent in the midyear, not the beginning of the year, as we will see the strong impact made from the slowdown in the world’s economy,” said Stuart Thompson, fund manager of Ignis, a large-scale assets management company.

But some experts said that the international debt crisis risk is not that large though the amount of debt due this year of major economies is quiet high. The United States, as one of the two biggest debtor nations, benefits from the risk-protection function of U.S. dollar, with no fear of the liquidity temporarily; while most of the debt investors of Japan are local, so the borrowing cost of both nations at present is still relatively low.

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