As the coronavirus pandemic ranged throughout the globe, all countries of the world were forced to resort to emergency efforts. To cope with the coronavirus-triggered downturn, the governments had to spend huge sums of money. As a result, global debt climbed to a new all-time high.
According to the International Monetary Fund, public debt as a share of global gross domestic product soared to 97.6%. The total amount of debt owed by the world's governments amounted to $89.6 trillion by the end of last year.
To a great extent, this can be attributed to the monetary policy of the world's largest central banks, especially amid the pandemic. However, the coronavirus is not the only reason for such a high debt level. The opportunity to easily borrow at low interest rates proved to be attractive to a number of economies, while the pandemic just accelerated that process.
This measure aimed at mitigating the negative impact of the COVID-19 epidemic was supposed to further stimulate business activity and prop up economic growth in general. However, it resulted in debt overburden in a number of countries, primarily among the largest borrowers - the United States, Japan, and the euro area.
In 2020, global fiscal support totaled $14 trillion. The IMF estimates that global public debt will increase to 99.5% of the economic output in 2021.
