The Fiscal and Financial Risks of a High-Debt, Slow-Growth World

March 28, 2024-Higher long-term real interest rates, lower growth, and higher debt will put pressure on medium-term fiscal trends and financial stability
Inflation-adjusted interest rates are well above post global financial crisis lows, while medium-term growth remains weak. Persistently higher interest rates raise the cost of servicing debt, adding to fiscal pressures and posing risks to financial stability.

Decisive and credible fiscal action that gradually brings global debt levels to more sustainable levels can help mitigate these dynamics.

Public debt sustainability

Debt sustainability depends upon four key ingredients: primary balances, real growth, real interest rates, and debt levels. Higher primary balances—the excess of government revenues over expenditures excluding interest payments-and growth help to achieve debt sustainability, whereas higher interest rates and debt levels make it more challenging.

For a long time, debt dynamics remained very benign. That’s because real interest rates were significantly below growth rates. This reduced the pressure for fiscal consolidation and allowed public deficits and public debt to drift upwards. Then, during the pandemic, debt increased even more as governments rolled out large emergency support packages.

WEF-2024 Global Retail Investor Outlook

March 25, 2025--Key insights
Global capital markets have undergone a sustained fundamental shift, increasingly integrating individual investors into the financial ecosystem. This transformation has revolutionized how markets operate, establishing more accessible pathways for individuals to participate in spaces traditionally reserved for institutional and professional investors.

More Record-Breaking Growth Expected as Investors Lean on ETFs to Manage Global Uncertainty: BBH 2025 Global ETF Investor Survey

March 24, 2025--The ever-increasing demand for ETFs is fueled by investor appetite for liquidity, risk management, and diverse strategies.
Brown Brothers Harriman's 12th annual Global ETF Investor Survey of institutional investors, fund managers and financial advisors identifies a paradigm shift across the ETF landscape. The report reveals that a remarkable 95% of investors intend to increase their ETF allocations over the next 12 months, an increase from 82% in last year's survey.