The Covid-19 pandemic has had a profound impact on the global economy, leaving us with a significant stock of additional debt. For example, net government lending dropped from 1.5 percent (-2.3 percent ) of GDP to -4.2 percent (-13.4 percent ) in Germany (the UK) at the beginning of the Covid-19 pandemic. In addition, the economic fallout of the Russia-Ukraine war will increase the stock of government debt further. Servicing this debt will likely force governments to spend less or raise more revenue, probably a combination of both.
