The Institute of International Finance expects that global debt will jump to a record high of $ 277 trillion at the end of the global year as governments and companies continue to spend heavily in the face of the Corona pandemic.
The institute said, according to Arabic 21 website, that the debt has already ballooned by 15 trillion dollars this year to 272 trillion dollars by the end of September, and governments, especially developed markets, have contributed nearly half of this increase, and that the total debt of developed markets has jumped to 432 percent of GDP. In the third quarter of the year, compared to about 380 percent at the end of 2019.
The institute added that the debt-to-GDP ratio in emerging markets was about 250 percent in the third quarter, and China scored 335 percent, and the global ratio is expected to reach about 365 percent for the whole year.
The institute indicated that there is great uncertainty surrounding the way in which the global economy can pay off debts in the future, without disastrous repercussions on economic activity, noting that the total US debt is heading to $ 80 trillion in 2020 – according to the institute’s report.
In the same context, the countries of Lebanon, China, Malaysia and Turkey have witnessed the largest increases in the ratios of non-financial sector debt since the beginning of the year, and the decline in revenues of the governments of emerging market countries has led to more difficulties in repaying the debt, even in light of the low borrowing costs to record low levels around the world.
It is worth noting that the International Monetary Fund predicted last October that the global economy may contract by 4.4% this year, and then grow 5.2% in 2021.