Shafaq News/ Coronavirus pandemic has added about $24 trillion to the global debt over the last year, to take the total to $281 trillion and the worldwide debt-to-GDP ratio at over 355%.
The Global Debt Monitor of the Institute of International Finance (IIF) which Looks across different aspects of debt dynamics in emerging markets, said the debt as a ratio of world economic output known as gross domestic product surged by 35 percentage points to over 355% of GDP.
That upswing is well beyond the rise seen during the global financial crisis, when 2008 and 2009 saw 10 percentage points and 15 percentage points respective debt-to-GDP jumps.
Global Debt reported an increase in Governments debt to 105% in 2020, compared to 88% the previous year since many countries added $ 10.7 trillion in government debt to try to contain the Covid-19 pandemic.
Even as vaccines are rolled out, governments with big budget deficits are set to increase debt by another $10 trillion this year as political and social pressures make it hard to curb spending, pushing this group’s debt load past $92 trillion by end-2021, the IIF estimates.
The IIF report said also there are increases in non-financial industry debt-to-GDP ratios to 165% in 2020 compared to 124% in 2019.
It’s noteworthy that the debt rises were particularly sharp in Europe, with non-financial sector debt-to-GDP ratios in France, Spain, and Greece increasing some 50 percentage points.
The rapid build-up was mostly driven by governments, particularly in Greece, Spain, Britain and Canada. Switzerland was the only mature market economy in the IIF’s 61-country analysis to record a decline in its debt ratio.
In emerging markets, China saw the biggest rise in debt ratios excluding banks, followed by Turkey, Korea, and the United Arab Emirates. South Africa and India recorded the largest increases just in terms of government debt ratios.