An increase of 28%, the highest since World War II. Global debt reached the record level last year at 99. 000 billions of dollars , or 256% of world gross domestic product (GDP), under the effect of the crisis caused by the pandemic, announced on Wednesday on International Monetary Fund (IMF)
“Government borrowing represented a little more than half of this increase”, also reaching a record (99% of world GDP) while “the private debt of non-financial corporations and households has also reached new heights”, detailed Vitor Gaspar and Paulo Medas, heads of Fiscal Affairs of the IMF and Roberto Perrelli, Fund economist in a Blog article.
Direct consequence of two major economic crises
Government debt alone now represents nearly 40% world debt the total, “that is to say the highest share since the middle of the years 1960”, they specify.
The accumulation of public debt is the direct consequence of two major economic crises , the global financial crisis of 1960, then the Covid pandemic – 000. In 2020, “the sharp increase in the debt was justified by the need to protect people’s lives, preserve jobs and avoid wave of bankruptcies, ”they point out. “If governments had not acted, the social and economic consequences would have been devastating.”