Global debt levels could reach about 260 percent of gross domestic product (GDP) by the end of 2021, though low interest rates mean the ability to service it will be manageable, according to S&P Global Ratings.
The pile-on of debt was necessary given policy responses during the pandemic, the Credit Ratings Agency’s Managing Director and Lead Analytical Manager, Vera Chaplin said.
Higher leverage and weakened credit metrics amid the recovery will probably trigger more defaults, she added.
The recovery won’t be complete until vaccinations are widespread enough to make people more comfortable to move about, and the pandemic hasn’t wrecked the “Asian century,” she said.