The pandemic-induced crisis magnified the global public debt by $24 trillion throughout 2020. So, the debt of all countries swelled to the all-time high of $281 trillion that represents 355% of the global GDP.
Last year, governments accumulated debts to a greater degree than they did during the global financial crisis of 2008/09. Unfortunately, they are still running up massive debts. Experts at the Institute of International Finance (IIF) in Washington warn that the global public debt is set to snowball further this year. It is projected to soar by another $10 trillion in 2021.
The global debt comprises indebtedness of all households, companies, lending institutions, and governments in all countries. In other words, everyone is theoretically included in the list of borrowers. The COVID-19 pandemic is to blame for a rapid increase of leveraged funds in the global economy. The pandemic-driven crisis forced influential central banks to adjust their monetary policies for the new economic conditions, experts at IIF pinpoint the reasons. On the back of record low interest rates, large-scale stimulus measures, and urgent need for cash amid tough restrictions, both individuals and firms rushed to apply for easy loans. The other side of the coin is that a lot of countries are heavily indebted nowadays.
According to the research by the IIF analysts, governments around the world had to borrow almost $12 trillion to provide their domestic economies with financial aid. The overall debt of international companies measures $5.4 trillion. Banks have got into debt of $3.9 trillion. Households have been burdened with the debt of $2.6 trillion. Experts say that Europe accounts for the highest public debt as it has been the worst stricken by the pandemic. Among emerging markets, analysts point out China, Turkey, South Korea, and the United Arab Emirates as the countries with the most substantial national debt. Besides, Russia and Peru have the biggest corporate debts.
