Goldman Sachs: Too much debt and retirees in the world
The world has accumulated too much debt and is facing an aging population, and this means that the debt burden of countries may soon get out of control, says Andrew Wilson, head of Goldman Sachs Asset Management in Europe, the Middle East and Africa.
In his opinion, the growing debt burden throughout the world is one of the biggest threats to the global economy.
“There are too many debts and this is dangerous for the economy. Consequently, there is a clear need to generate growth to fight debt, but because of the changing demographic situation, new ways of thinking at the policy level are needed to do this,” Wilson added.
Traditionally, the demographic problem in most major economies, including the United States, Europe and Japan, is not considered to be the main one, and this puts the authorities and governments in a difficult issue of debt repayment.
Given the increase in life expectancy and the general aging of the population, there are no more working young people than are needed to maintain an economic model based on debt.In the past, she worked well, but now times are changing.
In Japan, total government debt has risen above 200% of gross domestic product, and this is a very good example of how demographic changes can work against the economy.
The Organization for Economic Co-operation and Development has also voiced its concerns about rising debt in Japan. If not to carry out reforms, the figure will exceed 400% of GDP by 2040