Take the pledge to vote

For a better tommorow#AajSawaroApnaKal
  • I agree to receive emails from News18

  • I promise to vote in this year's elections no matter what the odds are.
  • Please check above checkbox.

    SUBMIT

Thank you for
taking the pledge

Vote responsibly as each vote counts
and makes a diffrence

Disclaimer:

Issued in public interest by HDFC Life. HDFC Life Insurance Company Limited (Formerly HDFC Standard Life Insurance Company Limited) (“HDFC Life”). CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101 . The name/letters "HDFC" in the name/logo of the company belongs to Housing Development Finance Corporation Limited ("HDFC Limited") and is used by HDFC Life under an agreement entered into with HDFC Limited. ARN EU/04/19/13618
LIVE TV DownloadNews18 App
News18 English
Powered by cricketnext logo
News18 » Business
1-min read

The World is Drowning in Deficit as Debt-to-GDP Ratio Smashes Record of Already Huge Global Load

Such massive worldwide debt is a real risk for the global economy, especially because the IIF expects levels to rise even further in 2020.

CNN

Updated:January 14, 2020, 9:51 PM IST
facebookTwitter Pocket whatsapp
Digital Economy, Jobs in China, technology news
Image for representation.

New York: The world's already huge debt load smashed the record for the highest debt-to-GDP ratio before 2019 was even over.

In fact, it broke that record in the first nine months of last year. Global debt, which comprises borrowings from households, governments and companies, grew by $9 trillion to nearly $253 trillion during that period, according to the Institute of International Finance. That puts the global debt-to-GDP ratio at 322%, narrowly surpassing 2016 as the highest level on record.

Global-Debt

More than half of this enormous number was accumulated in developed markets, such as the United States and Europe, bringing their debt-to-GDP ratio to 383% overall.

There are plenty of culprits. Countries like New Zealand, Switzerland and Norway all have rising household debt levels, while the government debt-to-GDP ratios in the United States and Australia are at all-time highs.

In emerging markets, debt levels are lower, for a total of $72 trillion, but they have risen faster in recent years, according to the IIF.

China's ratio of debt to GDP, for example, is approaching 310%, the highest level in the developing world. Investors have long kept a skeptical eye on the highly-leveraged country. Following a push for Chinese companies to reduce their borrowing in 2017 and 2018, debt levels rose again last year, the IIF said in its Global Debt Monitor report.

Such massive worldwide debt is a real risk for the global economy, especially because the IIF expects levels to rise even further in 2020.

"Spurred by low interest rates and loose financial conditions, we estimate that total global debt will exceed $257 trillion" in the first quarter of 2020, the IIF said.

The Federal Reserve lowered interest rates three times last year, and the European Central Bank's benchmark rate is still at its post-financial crisis lows.

Despite favorable borrowing conditions, the refinancing risk is massive. A total of more than $19 trillion of syndicated loans and bonds will mature in 2020. It's unlikely that all of these will be refinanced or repaid.

Another issue that the report brings up is the financing needs for urgent climate change action.

The United Nations' Sustainable Development Goals require $42 trillion of infrastructure investments by 2030, but "countries with limited borrowing capacity could face severe challenges in meeting development finance needs," the IIF said.

Get the best of News18 delivered to your inbox - subscribe to News18 Daybreak. Follow News18.com on Twitter, Instagram, Facebook, Telegram, TikTok and on YouTube, and stay in the know with what's happening in the world around you – in real time.

Read full article
Next Story
Next Story

facebookTwitter Pocket whatsapp
Most Active
Company Price Change %Gain
Dr Reddys Labs 3,033.65 3.27
ICICI Bank 530.90 -1.14
Reliance 1,580.65 2.79
Bharti Airtel 500.00 5.47
Vodafone Idea 4.51 -25.21
Top Gainers
Company Price Change %Gain
Bharti Airtel 500.00 5.47
Reliance 1,580.65 2.79
Sun Pharma 454.45 1.24
HCL Tech 598.80 0.91
Maruti Suzuki 7,524.55 0.80
Top Losers
Company Price Change %Gain
IndusInd Bank 1,352.55 -2.46
SBI 318.00 -1.62
HDFC 2,453.95 -1.14
ICICI Bank 530.90 -1.14
Larsen 1,304.55 -1.10

Live TV

Countdown To Elections Results
To Assembly Elections 2018 Results