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Gloucestershire Business News

Warning over soaring levels of global debt

Worldwide debt soared even before the economic impact of the global coronavirus pandemic.

Figures released by the Institute of International Finance's Global Debt Monitor showed debt across all sectors rose by $10trillion to more than $255trillion by the end of 2019.

That put global debt at 322 per cent - 40 points higher than before the 2008 financial crisis.

And with governments forced to spend huge sums on helping business and workers during the pandemic, predictions for 2020 are stark.

The IIF said the issuing of gross government debt hit a record $2.1trillion last month, compared to an average of $0.9trillion between 2017-19.

And the institute said any global recession was poised to begin with $87trillion more global debt than the 2008 crisis.

IIF predictions put debt at 342 per cent of GDP (which is set to fall by three per cent globally) by the end of the year with a doubling of government borrowing.

Institute director Emre Tiftik told Sky News: "With the COVID-19 fiscal response in full swing, the global debt burden is set to rise dramatically.

"Remarkable uncertainty around the scale and duration of the pandemic makes point estimates challenging.

"A sharp upward trajectory in debt levels looks all but certain."

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