• ‘Attack of the debt tsunami’: Coronavirus pushes global debt to record high

    20 Nov 2020 | Economic News

‘Attack of the debt tsunami’: Coronavirus pushes global debt to record high

The coronavirus crisis pushed global debt levels to a new high of over $272 trillion in the third quarter, the Institute for International Finance said, as it warned of the “attack of the debt tsunami.”

The institute said global debt would break new records in the coming months to reach $277 trillion by the end of the year. This would represent a debt-to-GDP ratio of 365%.

Among advanced nations, debt surged above 432% of GDP in the third quarter — a 50 percentage points increase from 2019. The United States, which has implemented one of the biggest stimulus packages in the world, accounted for almost half of this rise.

In the euro zone, government action led to an increase of $1.5 trillion in public debt over the same period, to reach $53 trillion. This is still below the region’s all-time of $55 trillion seen in the second quarter of 2014, when the region was dealing with the sovereign debt crisis.

In emerging markets, debt levels rose to over 248% of GDP, with Lebanon, China, Malaysia and Turkey experiencing the biggest rises in non-financial-sector debt.

However, the coronavirus pandemic is not the sole factor to blame for the massive level of global debt.


Reference: CNBC

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