The debt of households, companies, banks and governments around the world reached a record of US$307,100 trillion in the first half of the year, after reaching US$297,000 trillion at the end of 2022, the International Institute of Finance (IIF).
In this way, the debt came to represent 336% of the world’s Gross Domestic Product (GDP) and continues its upward trend: a decade ago, its total amount was US$100,000 billion.
He higher debt growth so far this year it was in the advanced economies, where it expanded 80% and grew from US$199,400 billion in mid-2022 to US$207,000 billion a year later.
Meanwhile, in the emerging economies andThe volume of debt grew, but at a slower pace, from US$97,800 billion to US$100,000 billion.
Which are the countries that went into debt the most?
Among the powers, United States, Japan, United Kingdom and France They are the countries that took on the most debt, while China, India and Brazil topped the list among emerging countries.
By Economic sectorsthe IIF noted that, globally, households increased their debt to US$57,700 trillion (+2.8% annually), companies accumulated US$90,200 trillion (+2.4%), and governments reached US$87,300 billion (+3.56%).
Meanwhile, the financial system debt world went from US$68,300 billion to US$71,900 billion.
Why did global debt increase?
Part of the reason for increase in debt -indicated the IIF- was due to the tightening of financing conditions and the increase in rates, which entails greater financing costs for the states.
This also led to a “notable slowdown” in the delivery of credit to families and companies. Even so, the expansion of private credit markets continues despite the instability unleashed by Silicon Valley Bank or Credit Suisse at the beginning of the year.
The load of consumer debt “remains at largely manageable levels” in advanced economies, which would give central banks additional room to raise interest rates further if inflation continues, according to the IIF in a report cited by the DPA agency.
In reference to the government debt, The organization warned that the “international financial architecture is not adequately equipped to support unsustainable levels of national debt.”
With respect to percentage of debt over world GDP, It stood at 336%, two points more than the last quarter of 2022.
“After observing falls for seven consecutive quarters, the global debt-GDP ratio has resumed its upward path in the first two quarters of the year,” they noted.
In that sense, they pointed out that the percentage continues to be contained by the inflationary acceleration in the world and that, once wage and price pressures moderate, the rate will close the year at 337%.
Source: Ambito
