Global debt hit a record 307 trillion dollars in the second quarter of the year, although rising interest rates are curbing bank credit, while markets such as the United States and Japan led the rise.
According to a report by the Institute of international finance, the global debt in dollar terms increased ten trillion dollars in the first half of 2023 and 100 trillion over the past decade.
The latest increase raised the global debt to GDP ratio for the second quarter in a row to 336 percent, he said. And before 2023, this percentage has been declining for seven quarters.
The report said slowing growth along with curbing price increases were behind the high debt ratio.
“The sudden rise in inflation has been the main factor behind the sharp decline in the debt ratio over the past two years,” the IIF said, adding that with wage and price pressures moderating, even if they do not reach their targets, the debt-to-GDP ratio is expected to rise to exceed 337 percent by the end of the year.
More than 80 percent of the most recent debt accumulation came from the developed world, with the United States, Japan, Britain and France recording the largest increases. Among emerging markets, China, India and Brazil accounted for the largest rises.
The report comes days after the IMF announced that the global debt burden remains well above pre – covid-19 levels, despite a decrease in its percentage of total economic output last year.
“The fiscal deficit has led to the maintenance of high levels of public debt,” he added, pointing to “the increased spending of many governments to promote growth and face rising food and energy prices even after the termination of financial support disbursed against the backdrop of the pandemic.
