What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami
This paper presents a comprehensive analysis of the impact of COVID-19 on debt, puts recent debt developments and prospects in historical context, and analyzes new policy challenges associated with debt resolution. The paper reports three main resu...
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/801991638297695658/What-Has-Been-the-Impact-of-COVID-19-on-Debt-Turning-a-Wave-into-a-Tsunami http://hdl.handle.net/10986/36647 |
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okr-10986-366472021-12-04T05:10:44Z What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami Kose, M. Ayhan Nagle, Peter Ohnsorge, Franziska Sugawara, Naotaka CORONAVIRUS COVID-19 PANDEMIC IMPACT PUBLIC DEBT FISCAL TRENDS PRIVATE DEBT GLOBAL RECESSION BUSINESS CYCLE This paper presents a comprehensive analysis of the impact of COVID-19 on debt, puts recent debt developments and prospects in historical context, and analyzes new policy challenges associated with debt resolution. The paper reports three main results. First, even before the pandemic, a rapid buildup of debt in emerging market and developing economies—dubbed the “fourth wave” of debt—had been underway. Because of the sharp increase in debt during the pandemic-induced global recession of 2020, the fourth wave of debt has turned into a tsunami and become even more dangerous. Second, five years after past global recessions, global government debt continued to increase. In light of this historical record, and given large financing gaps and significant investment needs in many countries, debt levels will likely continue to rise in the near future. Third, debt resolution has become more complicated because of a highly fragmented creditor base, a lack of transparency in debt reporting, and a legacy stock of government debt without collective action clauses. National policy makers and the global community need to act rapidly and forcefully ensure that the fourth wave does not end with a string of debt crises in emerging market and developing economies as earlier debt waves did. 2021-12-03T15:10:25Z 2021-12-03T15:10:25Z 2021-11 Working Paper http://documents.worldbank.org/curated/undefined/801991638297695658/What-Has-Been-the-Impact-of-COVID-19-on-Debt-Turning-a-Wave-into-a-Tsunami http://hdl.handle.net/10986/36647 English Policy Research Working Paper;No. 9871 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
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Foreign Institution |
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Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
English |
| topic |
CORONAVIRUS COVID-19 PANDEMIC IMPACT PUBLIC DEBT FISCAL TRENDS PRIVATE DEBT GLOBAL RECESSION BUSINESS CYCLE |
| spellingShingle |
CORONAVIRUS COVID-19 PANDEMIC IMPACT PUBLIC DEBT FISCAL TRENDS PRIVATE DEBT GLOBAL RECESSION BUSINESS CYCLE Kose, M. Ayhan Nagle, Peter Ohnsorge, Franziska Sugawara, Naotaka What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| relation |
Policy Research Working Paper;No. 9871 |
| description |
This paper presents a comprehensive
analysis of the impact of COVID-19 on debt, puts recent debt
developments and prospects in historical context, and
analyzes new policy challenges associated with debt
resolution. The paper reports three main results. First,
even before the pandemic, a rapid buildup of debt in
emerging market and developing economies—dubbed the “fourth
wave” of debt—had been underway. Because of the sharp
increase in debt during the pandemic-induced global
recession of 2020, the fourth wave of debt has turned into a
tsunami and become even more dangerous. Second, five years
after past global recessions, global government debt
continued to increase. In light of this historical record,
and given large financing gaps and significant investment
needs in many countries, debt levels will likely continue to
rise in the near future. Third, debt resolution has become
more complicated because of a highly fragmented creditor
base, a lack of transparency in debt reporting, and a legacy
stock of government debt without collective action clauses.
National policy makers and the global community need to act
rapidly and forcefully ensure that the fourth wave does not
end with a string of debt crises in emerging market and
developing economies as earlier debt waves did. |
| format |
Working Paper |
| author |
Kose, M. Ayhan Nagle, Peter Ohnsorge, Franziska Sugawara, Naotaka |
| author_facet |
Kose, M. Ayhan Nagle, Peter Ohnsorge, Franziska Sugawara, Naotaka |
| author_sort |
Kose, M. Ayhan |
| title |
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| title_short |
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| title_full |
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| title_fullStr |
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| title_full_unstemmed |
What Has Been the Impact of COVID-19 on Debt? Turning a Wave into a Tsunami |
| title_sort |
what has been the impact of covid-19 on debt? turning a wave into a tsunami |
| publisher |
World Bank, Washington, DC |
| publishDate |
2021 |
| url |
http://documents.worldbank.org/curated/undefined/801991638297695658/What-Has-Been-the-Impact-of-COVID-19-on-Debt-Turning-a-Wave-into-a-Tsunami http://hdl.handle.net/10986/36647 |
| _version_ |
1764485679670099968 |