IMF: Global debt hit record high in 2020 of $226T

By Tuba Sahin

​​​​​​​ANKARA (AA) - Triggered by the coronavirus health crisis and resulting deep recession, global debt reached $226 trillion in 2020, the International Monetary Fund (IMF) said on Wednesday.

The figure last year rose 28 percentage points to 256% of global gross domestic product (GDP), the largest one-year debt surge since World War II, the IMF said on its website’s blog.

"Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, and rising inflation," it warned.

Public debt accounted for nearly 40% of total global debt, the highest share since the mid-1960s.

The IMF highlighted that the debt dynamics differed markedly across countries, as advanced economies and China accounted for more than 90% of the $28 trillion debt surge in 2020.

"These countries were able to expand public and private debt during the pandemic, thanks to low interest rates, the actions of central banks (including large purchases of government debt), and well-developed financial markets," it noted.

Public debt in advanced economies climbed to 124% of GDP in 2020, versus 70% of GDP in 2007, while private debt rose at a more moderate pace from 164% to 178% of GDP during the same period.

China accounted for 26% of the global debt surge.

Emerging markets (excluding China) and low-income countries accounted for small shares of the rise in global debt, around $1-$1.2 trillion each, mainly due to higher public debt.​​​​​​​