US based Institute of International Finance has reported that, the world has never been more indebted before and the debt will further rise in 2021 with more borrowing ahead amid the covid-19 Pandemic led economic crisis.
Points To Note
- According to IIF, the governments, companies and households have raised US$ 24 trillion by 2020 in order to offset the economic toll.
- This has resulted into the all-time high increase in the global debt.
- By 2020, the World’s debt stands at US$ 281 trillion.
- This accounts for more than 355% of global GDP.
- The Institute of International Finance further stated that, this debt will increase as a result of more borrowings.
- Institute of International Finance also estimates that, governments are facing the challenge of big budget deficits.
- This will increase by another US$ 10 trillion in 2021 since the political and social pressures pushes for more spending. This in turn will increase the debt load past US$ 92 trillion by the end of 2021.
- Institute of International Finance also states that, both mature and emerging markets will look for a perfect balance. The economic recovery may push the governments to start developing strategies in order to roll back the stimulus. This could increase the default and bankruptcy risk.
Institute of International Finance
The Institute of International Finance is the trade group for global financial services industry. It was established in 1983 by 38 banks of leading industrialized countries. Institute of International Finance was created in the aftermath of the international debt crisis of 1980s. The group now represent around 450 firms around 70 countries. The members of the Institute of International Finance include asset managers, commercial & investment banks, sovereign wealth funds, insurance companies, central banks, hedge funds and development banks. The group supports the financial industry in managing the risks.
World’s debt increases to $281 trillion in 2021 World’s debt increases to $281 trillion in 2021