Analytics, Economics, Estonia, Financial Services

Koppel commented that in the second half of the year, developed countries might reach a positive economic growth, but this is mostly caused by the measures adopted by the Governments and central banks that have thus far pumped unprecedented amounts of money into the system.

“These measures are certainly nothing that sustainable growth could be based on. Essentially this means that for a certain period of time, countries buy themselves out of something rather unpleasant. It is a big question, what will happen afterwards,” he said.

Koppel added that the main problem for developed countries is the gigantic debt burden. Several countries have developed big budgetary deficits that are covered with loans. Individuals’ loan burden is significant as well. “This means that now we might be facing a longer period of time where we can speak about serious saving activities and the decrease of amplification in the system, which begs the question that if people constantly save money, what could be the basis for growth,” noted the analyst.