December 16, 2021
1 min read

Covid pushes global debt to new highs

Debt increases are particularly striking in advanced economies, where public debt rose from around 70 per cent of GDP in 2007 to 124 per cent of GDP in 2020….reports Asian Lite News

Global debt rose to a record $226 trillion in 2020 as the world was hit by the raging Covid-19 pandemic and a deep recession, the International Monetary Fund (IMF) announced.

Global debt rose by 28 percentage points to 256 per cent of gross domestic product (GDP) in 2020, the largest one-year debt surge since World War II, Vitor Gaspar, director of the IMF’s Fiscal Affairs Department, wrote in a blog on Wednesday with his colleagues, citing figures from the IMF’s latest Global Debt Database.

Debt increases are particularly striking in advanced economies, where public debt rose from around 70 per cent of GDP in 2007 to 124 per cent of GDP in 2020.

Global Covid caseload tops 268 mn

Meanwhile, private debt rose at a more moderate pace from 164 to 178 per cent of GDP in the same period, according to the IMF.

ALSO READ: Chinese debt trap: Lanka going Ugandan way

The IMF officials noted that a crucial challenge for policymakers is to “strike the right mix of fiscal and monetary policies in an environment of high debt and rising inflation”, as the debt surge amplifies vulnerabilities.

Pic credits Twitter

“The risks will be magnified if global interest rates rise faster than expected and growth falters. A significant tightening of financial conditions would heighten the pressure on the most highly indebted governments, households, and firms,” they said.

The IMF officials suggested that some countries, especially those with high gross financing needs or exposure to exchange rate volatility, may need to adjust faster to preserve market confidence and prevent more disruptive fiscal distress.

In addition, the pandemic and the global financing divide demand strong, effective international cooperation and support to developing countries, they noted.

ALSO READ: US Senate nod to raise debt ceiling ahead of looming default

ALSO READ: Pakistan struggles to pay Chinese debts

Previous Story

India Art Fair to spotlight next-generation artists

Next Story

Australia eases curbs despite Omicron worries

Latest from -Top News

WAVES 2025: Jaishankar Advocates Cultural Pluralism

External Affairs Minister S. Jaishankar delivered a powerful address at the WAVES 2025 Global Media Dialogue, highlighting the significance of cultural pluralism in shaping global change. Speaking on the second day of

India Eyes Supply Chain Shift

India’s electronics manufacturing sector is undergoing a remarkable transformation, positioning the country as a major global hub for production and supply chain diversification. Riding on favourable government policies, geopolitical tailwinds, and a

India Bans All Pakistan Imports

In a sharp escalation of diplomatic hostilities, India has banned all direct and indirect imports from Pakistan with immediate effect, following the brutal terror attack in Jammu and Kashmir’s Pahalgam region that

Kashmir Crisis Deepens

Government of Pakistan Administered Kashmir has instructed residents living along the de-facto border, the Line of Control (LoC) with India to stockpile food and other essential items for at least two months…reports

China to evaluate offer of tariff talks  

Punishing US tariffs that have reached 145% on many Chinese products came into force in April while Beijing has responded with fresh 125% duties on imports from the US   China has
Go toTop

Don't Miss

Himachal’s economy likely to grow by 8.3%

The GSDP of the state at current prices in 2021-22

‘Inflation may ease in 2nd half of FY23’

Tracing the history of inflation in India, Das said in