Home Business News World’s $281 trillion debt pile is set to rise again in 2021...

World’s $281 trillion debt pile is set to rise again in 2021 – Times of India

NEW DELHI: The world has never been more indebted after a year of battling Covid-19. And there’s even more borrowing ahead.
Governments, companies and households raised $24 trillion last year to offset the pandemic’s economic toll, bringing the global debt total to an all-time high of $281 trillion by the end of 2020, or more than 355% of global GDP, according to the Institute of International Finance.
They may have little choice but to keep borrowing in 2021, said Washington-based director of sustainability research Emre Tiftik and economist Khadija Mahmood.
Even as vaccines are rolled out, low central bank policy rates are keeping issuance above pre-pandemic levels. Governments with big budget deficits are set to increase debt by another $10 trillion this year as political and social pressures make it hard to curb spending, pushing this group’s debt load past $92 trillion by end-2021, the IIF estimates.
“The most important challenge is to find a well-designed exit strategy from these extraordinary fiscal measures,” Tiftik said during a Wednesday webinar.
Both mature and emerging markets will be searching for a perfect balance. While an economic recovery may lead some governments to start developing strategies to roll back stimulus, doing so too soon could magnify default and bankruptcy risk. But waiting too long could lead to unwieldy debt loads.
Even amid historically muted credit spreads, global debt markets have started selling off, pushing up sovereign yields. Long-term US Treasury yields reached the highest in about a year this week.
Heavy load
Increases in non-financial industry debt-to-GDP ratios in France, Spain and Greece were among the sharpest in mature economies, as governments rapidly ramped up borrowing.
In emerging markets, China saw the biggest jump in debt ratios last year, followed by Turkey, Korea and the United Arab Emirates, IIF data show.
Here’s what else to know:
* Non-financial corporates are becoming more reliant on government support, which may exacerbate pre-existing vulnerabilities
* Financial corporates had the biggest annual jump in debt ratios in over a decade, according to the IIF; It was the first year-over-year rise since 2016
* In emerging markets, South Africa and India had the biggest increases in government debt ratios last year; Corporate debt accumulation was greatest in Peru and Russia
* Foreign-currency debt in the developing world lingered near $8.6 trillion in 2020 “as sharp losses in EM currencies reduced firms’ incentives to borrow in foreign currency,” according to the IIF

Source link

In this blog our main motive is to provide you all kind of latest information about technology, politics, sports, and health. If you want to read this information then you should have to visit our website. This information will help you to increase your knowledge.


Please enter your comment!
Please enter your name here

Most Popular

Joe Biden: US President Biden to meet with Mexican president amid migration issues | World News – Times of India

WILIMINGTON: US President Joe Biden is planning a virtual meeting on Monday with Mexican President Andres Manuel Lopez Obrador...

Yemenis reel from poverty, hunger as UN pleads for funds and war’s end | World News – Times of India

SANAA: Unable to find work, Ahmed Farea has sold everything including his wife's gold to feed and house two young daughters in one...

Air India cancels all pilots’ leaves to add flights as domestic travel touches new post-Covid high – Times of India

NEW DELHI: In a sign that more flights, perhaps even international, could be allowed soon, Air India has cancelled leaves of its pilots...

300 activists rally in Bangladesh to denounce prison death | World News – Times of India

DHAKA: About 300 student activists rallied in Bangladesh's capital on Monday to denounce the death in prison of a writer and...

Recent Comments