Global debt surged by 28% to $226 trillion in 2020, according to the latest IMF data, representing 256% of global GDP. More than 90% of this increase came from advanced economies and China.
Slightly more than half of the increase in debt came from the public sector with the global public debt ratio now accounting for 99% of global GDP. Public debt accounts for 40% of global debt.
According to the report public debt increases are particularly notable in the advanced economies, rising from 70% of GDP in 2007 to 124% of GDP in 2020 while private debt rose from 164%v to 178% of GDP in the same period.
“The large increase in debt was justified by the need to protect people’s lives, preserve jobs, and avoid a wave of bankruptcies,” noted the reports authors. “If governments had not taken action, the social and economic consequences would have been devastating. But the debt surge amplifies vulnerabilities, especially as financing conditions tighten.”
The report also notes that global debt in emerging markets reached record highs and that of low-income countries reached levels not seen since the early 2000s.