perspectives d’investissement

    Fear and loathing in global debt

    Fear and loathing in global debt
    Stéphanie de Torquat - Stratège macro

    Stéphanie de Torquat

    Stratège macro

    An analysis of the sustainability and challenges of debt

    Originally, debt did not bear the negative connotation it carries today. Debt was – and is – at the heart of new projects and underpins the materialisation of innovations.

    Yet, the significant rise in global debt over the past two decades to near all-time highs begs the legitimate questions of its sustainability, and of our capacity to grow without further excessive leverage.

    Some inevitable pockets of vulnerability aside, we note that most of the debt remains sustainable for now, mainly thanks to low rates across sectors, maturities, and geographies.

    Most of the debt remains sustainable for now

    However, high global debt carries necessary consequences, in the form of new central bank policies, inequality, and above all, much lower potential growth.

    The current debt sustainability may be our window of opportunity to grow differently

    Today, we may have reached the limits of the debt-driven growth model. The current debt sustainability – while fragile and not a given – may nonetheless be our window of opportunity to grow differently, as reducing inequalities in the vast majority of world economies may be an efficient way to support consumption without relying on excessive debt build-up. This offers some hope that the worst end-game scenarios of disorderly default can perhaps be avoided.

    Read our detailed analysis here

    Information Importante

    Le présent document de marketing a été préparé par Banque Lombard Odier & Cie SA ou une entité du Groupe (ci-après « Lombard Odier »). Il n’est pas destiné à être distribué, publié ou utilisé dans une juridiction où une telle distribution, publication ou utilisation serait interdite, et ne s’adresse pas aux personnes ou entités auxquelles il serait illégal d’adresser un tel document.

    En savoir plus.