What shadows will sovereign debt cast across the decade?

Abstract

A country's future sovereign debt depends on its domestic macroeconomic performance, its sustainability, its ability to attract foreign investments, and whether its economy can pay-off domestic and external debts. The global financial crisis shows that unsustainable debt is harmful to any economy regardless of size. Consequently, into the future, countries need to develop effective policy responses to compensate against possible sovereign debt and interest rate rises, otherwise their international ratings may be downgraded, and their economies weakened.