$10.2 trillion: The amount of money advanced-nation governments will need to borrow in 2011
As the debts of advanced countries rise to levels not seen since the aftermath of World War II, itâ€™s hard to know how much is too much. But itâ€™s easy to see that the risk of serious financial trouble is growing.
Next year, fifteen major developed-country governments, including the U.S., Japan, the U.K., Spain and Greece, will have to raise some $10.2 trillion to repay maturing bonds and finance their budget deficits, according to estimates from theÂ International Monetary Fund. Thatâ€™s up 7% from this year, and equals 27% of their combined annual economic output.
Aside from Japan, which has a huge debt hangover from decades of anemic growth, the U.S. is the most extreme case. Next year, the U.S. government will have to find $4.2 trillion. Thatâ€™s 27.8% of its annual economic output, up from 26.5% this year. By comparison, crisis-addled Greece needs $69 billion, or 23.8% of its annual GDP.
So far, with the notable exception of Greece, major advanced nations havenâ€™t had too much trouble raising the money they need. Japanâ€™s domestic investors have consistently bought its government bonds despite their low yield. Foreign investors have been snapping up U.S. Treasury bonds, which remain the worldâ€™s premier safe-haven investment.
Still, thereâ€™s reason to be concerned that governmentsâ€™ appetite for borrowing could ultimately push up interest rates, or worse.
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