Moody's: Growth among sovereigns remains subdued ten years on from crisis

Moody's Investors Service in a new report, noted that the growth outlook for Moody's rated sovereigns remains subdued when compared with the growth achieved in the decade before the financial crisis.

Key Quotes:

“It draws conclusions across regions and globally and compares today's global growth prospects, government debt indicators, and monetary gauges to those from a decade ago and before the financial crisis.

Between 2008 and 2017 (F), real growth for Moody's rated sovereigns averaged 2.9% for Moody's, compared to 4.3% from 1998 to 2007. Looking ahead, Moody's expects global growth of 2.8% for 2017 to 2018.

"This slowdown in growth compared to the period prior to the global financial crisis has affected the fiscal profiles of our rated sovereigns. Governments have been unable to rely on growth to reduce debt as a share of GDP.

Since the crisis, government debt metrics have deteriorated across both advanced and emerging market economies. Between 2007 and 2017F, the median increase in sovereign debt was 15 percentage points.

The increase was due to a combination of spending during and after the crisis and the revenue impact of subdued growth since the crisis."