{"id":113233,"date":"2021-02-17T17:14:41","date_gmt":"2021-02-17T17:14:41","guid":{"rendered":"https:\/\/precoinnews.com\/?p=113233"},"modified":"2021-02-17T17:14:41","modified_gmt":"2021-02-17T17:14:41","slug":"covid-response-drives-24-trillion-surge-in-global-debt-iif","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/covid-response-drives-24-trillion-surge-in-global-debt-iif\/","title":{"rendered":"COVID response drives $24 trillion surge in global debt: IIF"},"content":{"rendered":"

LONDON (Reuters) – The COVID pandemic has added $24 trillion to the global debt mountain over the last year a new study has shown, leaving it at a record $281 trillion and the worldwide debt-to-GDP ratio at over 355%.<\/p>

FILE PHOTO: Buildings are seen in the Canary Wharf business district, amid the outbreak of the coronavirus disease (COVID-19), in London, Britain January 27, 2021. REUTERS\/Peter Cziborra<\/figcaption>

The Institute of International Finance\u2019s global debt monitor estimated government support programmes had accounted for half of the rise, while global firms, banks and households added $5.4 trillion, 3.9 trillion and $2.6 trillion respectively.<\/p>\n

It has meant that debt as a ratio of world economic output known as gross domestic product surged by 35 percentage points to over 355% of GDP.<\/p>\n

That upswing is well beyond the rise seen during the global financial crisis, when 2008 and 2009 saw 10 percentage points and 15 percentage points respective debt-to-GDP jumps.<\/p>\n

There is also little sign of a near-term stablisation.<\/p>\n

Borrowing levels are expected to run well above pre-COVID levels in many countries and sectors again this year, supported by still low interest rates, although a reopening of economies should help on the GDP side of the equation.<\/p>\n

\u201cWe expect global government debt to increase by another $10 trillion this year and surpass $92 trillion,\u201d the IIF report said, adding that winding down support could also prove even more challenging than it was after the financial crisis.<\/p>\n

\u201cPolitical and social pressure could limit governments\u2019 efforts to reduce deficits and debt, jeopardizing their ability to cope with future crises.\u201d<\/p>\n

\u201cThis could also constrain policy responses to mitigate the adverse impacts of climate change and natural capital loss,\u201d it added.<\/p>\n

Graphic: Global debt surges to new record high –<\/p>\n

EUROPE DEBT<\/h2>\n

Debt rises were particularly sharp in Europe, with non-financial sector debt-to-GDP ratios in France, Spain, and Greece increasing some 50 percentage points.<\/p>\n

The rapid build-up was mostly driven by governments, particularly in Greece, Spain, Britain and Canada. Switzerland was the only mature market economy in the IIF\u2019s 61-country analysis to record a decline in its debt ratio.<\/p>\n

In emerging markets, China saw the biggest rise in debt ratios excluding banks, followed by Turkey, Korea, and the United Arab Emirates. South Africa and India recorded the largest increases just in terms of government debt ratios.<\/p>\n

\u201cPremature withdrawal of supportive government measures could mean a surge in bankruptcies and a new wave of non-performing loans,\u201d the IIF said.<\/p>\n

However, sustained reliance on government support could pose \u201csystemic risks\u201d as well by encouraging so-called \u2018zombie\u2019 firms – the weakest and most indebted corporates – to take on even more debt.<\/p>\n

Graphic: COVID sovereign debt surge –<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

LONDON (Reuters) – The COVID pandemic has<\/p>\n","protected":false},"author":3,"featured_media":113232,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"\nCOVID response drives $24 trillion surge in global debt: IIF - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/business\/covid-response-drives-24-trillion-surge-in-global-debt-iif\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"COVID response drives $24 trillion surge in global debt: IIF - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"LONDON (Reuters) – The COVID pandemic has\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/business\/covid-response-drives-24-trillion-surge-in-global-debt-iif\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-02-17T17:14:41+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/02\/cnewsfotor9-4.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/business\/covid-response-drives-24-trillion-surge-in-global-debt-iif\/\",\"url\":\"https:\/\/precoinnews.com\/business\/covid-response-drives-24-trillion-surge-in-global-debt-iif\/\",\"name\":\"COVID response drives $24 trillion surge in global debt: IIF - 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