Protecting an economy from a pandemic isn’t cheap.
Officials, mainly from rich countries, are spending and lending more than $5 trillion to keep their nations from tumbling into an economic black hole caused by the novel coronavirus. Governments will be supporting legions of unemployed and under-utilized workers indefinitely, at the same time that tax revenues are drying up as economic activity plunges. To pay for it, these countries are having to borrow a bunch of money.
Rich nations were saddled with quite a bit of debt even before the Covid-19 crisis. Their ratio of net debt to gross domestic product was at about 77% last year, according to the International Monetary Fund. The IMF forecasts that number to shoot up to 94% in 2020. Their debt burden is soaring at the same time GDP is contracting.