Credit crunch

9 June 2009 By Martin Hutchinson

Investors are just starting to worry that current high government borrowing will cut into more productive investment. Martin Hutchinson thinks they should be even more concerned.

This content is for Subscribers only

Context News

The US budget deficit is currently forecast by the Congressional Budget Office to be $1,845bn in the year to September 2009 (13.1% of GDP) $1,379bn in 2010 (9.6% of GDP) and $970bn in 2011 (6.4% of GDP).

Britain's fiscal deficit in the year to April 1976 was 10.6bn pounds (9% of GDP); in November 1976 it was forced to negotiate a $3.9bn bailout loan from the International Monetary Fund.

Brazil's fiscal deficit averaged 4.2% of GDP through the 1990s, peaking at 9.5% of GDP in 1999.

Japan's public debt is currently around 180% of GDP and its fiscal deficit 9% of GDP; its economy declined in the first quarter by 9.7% yearonyear, the worst of any major economy.

Email a friend

Please complete the form below.

Required fields *