Canada will face a debt crisis and enter recession within 3 years according to Steve Keen of the Kingston University London. The economist named 7 countries that are most vulnerable to a debt crisis; China, Australia, Sweden, Hong Kong, Korea and Norway are the others.
Keen warned that even though government programs, for example schemes to help first-time home buyers and central bank stimulus, can delay a crisis GDP must grow faster to avoid a continued escalation of debt levels. He said that as debt levels soar lenders will begin to reduce their willingness to offer credit to companies and individuals, resulting in a new ‘credit crunch’ as seen during the financial crisis.
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