Data released by the Institute of International Finance showed that global debt rose by more than $ 17 trillion during 2020, to $ 275 trillion, amid the pressures of the new Corona virus pandemic.
The institute revealed that the rise was driven by a sharp build-up in government borrowing, which raised the ratio of global government debt to GDP to 105% last year from 90% in 2019.
According to the report, the global economy entered 2021 amid growing imbalances, and with a record amount of debt that will affect the prospects for recovery, it revealed that governments, especially in emerging markets, continue to borrow, warning that the heavy reliance on foreign capital may make borrowers in emerging markets more vulnerable to sudden shifts in global risks.
The Corona pandemic during 2020 led to unprecedented turmoil in all economic sectors, prompting central banks around the world to adopt huge stimulus packages, and also lowered interest rates in an attempt to revive the global economy.
In data released by the Institute of International Finance last November, total developed market debt jumped to 432% of GDP in the third quarter of 2020, compared to about 380% at the end of 2019. The debt-to-GDP ratio in emerging markets was about 250% in the third quarter, and China scored 335%.
Source (Al-Araby Al-Jadeed Newspaper, Edited)