Global public debt has never been higher. Debt in the Netherlands also increased by 12% last year. Yet Sander van der Ent of asset manager Janus Henderson isn’t worried about it. “Accessibility is good for us, especially compared to neighboring countries.”
Total public debt increased by 7.6% last year to a record $66.2 trillion. “We expect it to rise to $77 trillion by 2025,” says Van der Ent. Even if that figure also fades. “If you relate that to the debt-to-GDP ratio, which is the ratio of debt to gross national product (GNP), then we see it actually improves.”
Although that doesn’t say it all. “More importantly, debt affordability is deteriorating,” says Van der Ent. This is due to rising interest rates. Interest charges have increased by 20% worldwide. This is the fastest increase since 1984. These burdens will have a heavier impact than in the past, because there is more debt around the world.’
The Dutch debt-to-GDP ratio is low
Debt also increased in the Netherlands last year, by no less than 12%. “This is a larger increase than in the countries around us,” says Van der Ent. ‘But our debt-to-GDP ratio is quite low at 51%. As a result, affordability is good, certainly compared to those other countries.’ The asset manager expects the Dutch listing to decline slightly by 2025, to 48%.
“Debt may go up, but if growth accelerates or stays the same, then you really won’t see a change in the debt-to-GDP ratio”
Our economy is simply in good shape, Van der Ent explains. “Debt can go up, but if growth accelerates or stays the same, then you don’t really see a change in the debt-to-GDP ratio.”
If you calculate per capita, Dutch debt is likely to increase from USD 31,000 in 2021 to USD 33,000 in 2025. “But again, it’s manageable and below average,” says the wealth manager.
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
