World debt to soar 45%

Paris - The debt weighing on national budgets will have soared by up to 45% worldwide in the period from 2007 to 2010, leading ratings agency Moody's estimated on Wednesday.

"Preliminary estimates suggest that the total stock of sovereign debt will have risen by as much as 45 percent or $15.3 trillion from 2007 to 2010," Moody's analyst Jaime Reusche said in a statement.

This is "over 100 times the inflation-adjusted cost of the Marshall Plan," the huge US investment programme launched to revive Europe after World War II, he added.

Moody's estimated in a report that the total global debt in 2010 would reach more than $49 trillion.

The members of the G7 grouping of rich countries will account for more than three-quarters of the increase, "as their fiscal accounts have been hit hardest by the crisis," Reusche said.

"As growth turns negative in 2009 for most countries, the relative debt load becomes harder to bear."

Several major economies including the United States, Japan and Germany have emerged from recession in recent months, but observers have warned of risks to recovery, partly from the debts accumulated in tackling the downturn.

As governments take on a huge debt load in their fight to ease the effects of recession, the global ratio of debt to economic production is forecast to hit 80 percent in 2010 from 63 percent in 2008, Moody's said.

- AFP