Global economy debt burden hits record $307 trillion

Washington – The Institute of International Finance (IIF), an international think tank, has presented a report that the global debt burden has increased to $307 trillion. Besides, the IIF warned that this debt burden is growing because of additional provisions for the defence sector due to geopolitical tensions and rising interest rates. Moreover, the debt of the global economy had increased by $10 trillion in the first six months of 2023.

In addition, the Institute of International Finance recently released a new report under the Global Debt Monitor that draws attention to the alarmingly growing debt crisis in the global economy. By the end of 2019, before the Coronavirus pandemic started, the debt burden on the global economy was $260 trillion. In the next 3.5 years, it has grown by more than $45 billion. By the end of the first six months of 2023, the debt burden of the global economy has increased and reached $307 trillion.

Furthermore, debt in the global economy has increased by $10 trillion in the first six months of the new year. Looking at the GDP of the international system, this think tank highlighted the debt reaching 336%.

Also, the IIF report says that the extent of borrowings has increased in advanced countries and those countries recognised as emerging markets. In the first six months of 2023, developed countries have been responsible for 80% of the debt rise. The countries with the most loans include the US, Japan, the UK and France. At the same time, the think tank has clarified that the amount of debt in emerging economies China, Brazil and India has increased.

The Institute of International Finance claimed various reasons behind the rising debt burden. Besides, healthcare expenses have increased significantly due to the Covid-19 pandemic. Also, many countries have increased defence spending due to international geopolitical tensions.

At the same time, there have been major changes in the values of currencies due to the increase in interest rates by the top central banks, including the US, since last year. IIF drew attention to the impact of all this on the rise in debt. Nonetheless, the think tank has warned that this increase will continue in the coming days, and the debt repayment issue may become serious. The report also notes that the global debt burden has increased by $100 trillion over the past decade.