Due to the COVID-19 and policies put in place to respond to it, the global debt has jumped to a new high of $226 trillion. International Monetary Fund said on Wednesday.
Advanced economies and China contributed more than 90% to the accumulation of world-wide debt in 2020.The remaining emerging economies and low-income developing countries contributed only around 7%.
‘Because of COVID-19,and of policies put in place to respond to it, debt level increased fast and reached high levels. High and rising levels of public and private debt are associated with risks to financial stability and public finance,
‘ IMF Director of Fiscal affairs Department Vitor Gaspar told reporters during a release of the 2021 Fiscal Monitoring Report. ‘The debt of governments, households and non-financial corporations added up to $226 trillion in 2020’$27 trillion above 2019.
This increase is, by far, the largest on record,’ he said. This figure includes both public and non-financial private sector debt.
Constraints on financial are particularly severe for poor countries, Gasper said. adding debt is expected to decline this year and next’ by about 1 % point of GDP per year.