Public sector debt issuance to prolong global downturn
There are five separate but related financial crises in progress currently, according to UK-based economist Andrew Hunt, including one that has yet to emerge over public sector finances.
Addressing the Sixth Annual van Eyk Research conference in Sydney yesterday, Hunt said the various US rescue and stimuli plans alone could push total public sector debt issuance this year to more than US$3.5 trillion, and amount to more than $1 trillion per annum over the next five years.
Hunt added that in the UK, total borrowing by the Government could amount to several hundred billions of pounds this year, and again in 2010, with a movement to large fiscal deficits underway in Europe. A similar though less advanced movement is also taking place in China, Japan, and Asia.
As a consequence, he said, the public sector’s financial position will be under “acute stress globally by 2010, demanding a draconian tightening of fiscal regimes around the world by the second decade of the 2000s".
“This will by itself help to constrain global economic activity even after the private sector and financial institutions have finished their period of convalescence from the excesses of the early 2000s,” he said.
Recommended for you
The central bank has released its decision on the official cash rate following its November monetary policy meeting.
ASIC has cancelled the AFSL of a Melbourne-based managed investment scheme operator over a failure to pay industry levies and meet its statutory audit and financial reporting lodgement obligations.
Melbourne advice firm Hewison Private Wealth has marked four decades of service after making its start in 1985 as a “truly independent advice business” in a largely product-led market.
HLB Mann Judd Perth has announced its acquisition of a WA business advisory firm, growing its presence in the region, along with 10 appointments across the firm’s national network.
