The coronavirus pandemic caused an unprecedented level of economic contraction around the world, leading to record levels of government spending on stimulus measures in response. As a result, global debt has increased by another $ 24 trillion in the past year to a record $ 281 trillion.
According to recent data published by the Institute of International Finance (IIF), government spending contributed to a $ 5.4 trillion increase in total global debt by 2020, while banks and households were $ 3.9 trillion and $ 2 trillion, respectively. , 6 trillion were good.
With global debt now erupting to a record $ 281 trillion, the debt-to-global GDP ratio has risen 35 percentage points to over 355%. The increase in debt is even greater than the increase recorded during the global financial crisis, with debt to GDP growing by 15% in 2009. The report found that debt levels increased significantly in Europe, particularly France and Spain. and Greece.
In the future, the IIF expects borrowing levels to remain high in many countries and sectors in 2021, thanks to historically low interest rates. “We expect global government debt to increase by another $ 10 trillion this year and surpass $ 92 trillion”, the report said. However, the IIF warns that a premature withdrawal of economic support by governments could lead to a sudden increase in bankruptcies, as well as an increase in non-performing loans.
Information for this briefing was found through the IIF. The author has no securities or affiliation with this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing any protection. The author is not licensed.
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