Public CompanyCrisis fallout: nations will be more cautious, govt debt swells
In a key fallout of the global economic crisis, which gathered steam with the collapse of the Lehman Brothers exactly a year ago, countries will now be more cautious amid the ballooning government debt across economies.
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According to analysts, everyone across the globe has learnt several important lessons from the financial turmoil during the past year or two, which has made them highly risk averse.
"Government bodies have learnt the importance of adequate regulation and businesses have seen the consequences of excessive risk taking," Moody"s Economy.com economist Sherman Chan said from Australia.
In the near term, "we will see all stakeholders taking a more cautious attitude," Chan added.
To tackle the turmoil, governments have significantly increased public spending.
"Probably, the biggest change in the global economy in the past year has been the sharp increase in government debt," Fitch Ratings Head of Asia-Pacific Sovereign Ratings James McCormack said.
After being hit by the financial storm, the global economy is widely expected get back on the growth track by early 2010.
Besides, analysts feel due to the unprecedented revamp in the global economic order after the demise of the Lehman Brothers, emerging markets, especially India and China would gradually have a greater role to play in charting international economic policy co-ordination.
"They (India and China) have surprised the world by maintaining strong growth rates. Both should have a greater say in global affairs over time, but this should be due to their growing contribution to the global economy rather than their role in supporting the global economy during the crisis," Chan added.