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- Barclays says Italy's debt burden sustainable, likely to remain high
Barclays says Italy's debt burden sustainable, likely to remain high
Reuters reports that although Italy's debt burden is rising sharply in the face of the COVID-19 shock, its debt trajectory is likely to stabilise at high levels rather than end up on "unsustainable exponential path," Barclays said in a new report on Wednesday.
"The key contributor is the structurally low core interest rates and the ECB's commitment to putting a cap on Italian spreads," Barclays said, referring to the European Central Bank's massive asset purchase scheme.
In a major new report on debt in developed markets, Barclays estimated the euro area debt-to-GDP was likely to increase to around 100% in 2020 from around 85% in 2019. It said the debt/GDP ratio may reach 165% in Italy.
Barclays analysts said the bar for a new euro zone debt crisis was high versus 2010-12, noting a sharp fall in financing costs.
They added that they expected the U.S. debt/GDP ratio to increase almost 30 percentage points over the next two years.
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