The corona virus is leading global debt to a new record high

The corona virus is leading global debt to a new record high

A pressman at the U.S. Bureau of Engraving in Washington DC collects uncut sheets of 20 bills on July 12, 2012.

Paul J. Richards | AFP | Getty Images

London – The Coronavirus In the third quarter of the crisis, global debt levels reached $ 272 trillion. The Institute for International Finance has issued a tsunami alert.

Global debt is set to reach $ 277 trillion in the coming months. It represents 365% of the GDP to GDP ratio.

This is due to the fact that governments around the world have strengthened their support for companies and citizens to fight the Pandemic globally. Businesses also had to seek alternative funding as operations ceased in the wake of Kovid-19. Both cases translate into higher debt, so there is more debt.

The global debt burden, which led to a sharp rise in government and corporate debt during the Covid-19 pandemic, increased by $ 15 trillion in the first three quarters of 2020 to $ 272 trillion now, ”IIF said in its latest Global. Debt Monitor, Wednesday.

In developed countries, debt is above 432 percent of GDP in the third quarter – 50 percentage points compared to 2019. The United States, which has implemented one of the largest stimulus packages in the world, will make up about half of this increase.

The pace of global debt has been unprecedented since 2016.

In the eurozone, government action increased public debt by $ 1.5 trillion over the same period, to $ 53 trillion. This is less than the region’s $ 55 trillion seen in the second quarter of 2014, when the region was facing a sovereign debt relief crisis.

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In emerging markets, debt levels have risen by more than 248 percent of GDP, with Lebanon, China, Malaysia and Turkey experiencing the largest increase in non-economic debt.

However, the corona virus pandemic is not the only one responsible for the massive global debt.

“The pace of global debt collection has been unprecedented since 2016, increasing by more than $ 52 trillion,” the IIF said.

Although the Kovid-19 epidemic has recorded a jump of $ 15 trillion by 2020, the increase in debt over the past four years has surpassed $ 6 trillion over the previous four years.

Large indebtedness puts governments, companies and employees at greater risk during recessions because those debts need to be met.

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