Global debt has reached a record high of $315 trillion and continues to grow
28 May 2024 15:00
According to the Institute of International Finance, global debt has set a new record at USD 315 trillion. The debt combines borrowing by households, businesses and governments. CNBC writes about this, "Komersant Ukrainian" reports
“This is a staggering amount and the world has not seen such a large amount of debt since the Napoleonic Wars. If the global debt were divided among all the people on the planet, each of us would owe about $39,000, the publication notes.
Global debt combines borrowing by households, businesses and governments.
Household borrowing, which includes things like mortgages, credit cards, and student debt, stood at $59.1 trillion at the start of 2024.
Corporate debt, which corporations use to finance their operations and growth, totalled $164.5 trillion, with the financial sector alone accounting for $70.4 trillion of that amount.
There is also public debt, which is used to finance public services and projects without raising taxes. Countries can borrow from each other or from global institutions such as the World Bank and the International Monetary Fund. Public debt stood at $91.4 trillion.
Japan, the world’s fourth largest economy, is also one of the world’s most indebted countries, with a total debt of more than 600% of GDP. Although most of Japan’s debt is public, in recent years it has been accumulated by the financial sector, not the government.
Roughly two-thirds of the $315 trillion in debt comes from developed economies, , with Japan and the United States making up the largest contributors to this debt pile. But in general, the debt-to-GDP ratio for developed economies is declining.
Emerging markets, on the other hand, had $105 trillion in debt, but the EM debt-to-GDP ratio hit a new high of 257%, pushing the overall ratio up for the first time in three years. The largest contributors were China, India and Mexico.
