Global debt has crossed an all-time high

Global debt rose by $4.8 trillion during the second quarter of this year, breaking an all-time record of $296 trillion at the end of June, according to a report cited by Reuters that the Institute of International Finance (IIF) for its abbreviation. in English) published this Tuesday.

The text of the IFF, the global business association of financial institutions, notes that total debt levels – which includes government, local, corporate and bank debt – have reached $36 trillion above levels recorded before the Covid-19 pandemic.

What expectations are there?

In the opinion of Emre Tiftik, director of sustainability research at the Institute of International Finance, if debt continues at this rate, global debt is expected to exceed $300 trillion, although he did not give a specific date.

On the other hand, the report of the Institute of International Finance indicates that a positive sign NS debt forecastThe global debt-to-GDP ratio fell for the first time since the outbreak of the health emergency.

Specifically, debt as a percentage of GDP decreased by about 353% during the second quarter of this year, mainly due to the strong recovery in economic activity in various countries.

Insufficient recovery

However, it is noted that in many cases, recovery has not been announced enough to bring debt ratios back to pre-coronavirus pandemic levels.

In this sense, the Institute of International Finance notes that the relationship between debt and GDP, excluding the financial sector, is below pre-pandemic levels only in five countries: Mexico, Argentina, Denmark, Ireland and Lebanon. Similarly, the A significant increase subordinate debt levels from China.

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Globally, household debt rose by $1.5 trillion in the first six months of 2021, to $55 trillion, while total sustainable debt issuance exceeded $800 billion so far this year.


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