No end in sight for record-high public debt fueled by COVID-19

Investment for economic growth more important than tax increases or austerity

20201023 Data Watch

Countries are searching for smarter taxation and spending programs to spark economic growth.

MARIKO KODAKI and KAZUYA MANABE, Nikkei staff writers

TOKYO -- Countries around the world have expanded fiscal expenditure due to the coronavirus pandemic, causing public debt to balloon to unprecedented levels. The debt-to-gross domestic product ratio of advanced economies in 2021 will reach a record high of 125%.

To rebalance budgets, investment to accelerate economic growth will be more important than raising taxes or imposing austerity measures. This is because, in the long term, GDP growth influences tax income.

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