In 2020, the corona pandemic led to the largest increase in global debt in a single year since the second world war. This is the conclusion of an analysis by the international monetary fund (IMF) published in washington on wednesday.
According to the report, debt increased by 28 percentage points to 256 percent of global economic output, which is expressed in gross domestic product (GDP). The global debt amounted to 226 billion US dollars (200 billion euros).
According to IMF calculations, more than half of the new debt in 2020 will be incurred by governments. Both global government debt (99 percent of gdp) and household (58 percent) and corporate (98 percent) debt reached record levels. The 2008/2009 financial crisis and the corona crisis in particular drove up public debt, according to the report of the monitoring fund.
Burdens unevenly distributed
The report’s authors, IMF economists vitor gaspar, paulo medas, and roberto perrelli, found an uneven distribution of borrowing: advanced economies and china had borrowed heavily in the fight against a corona recession. Many developing countries have not been able to do so. They had limited access to financing sources and had to pay higher interest rates.
IMF experts see high debt growth as justified. The governments had thus "protected people’s lives, preserved jobs and prevented a wave of company bankruptcies". At the same time, the authors warn of dangers: if the central banks were to raise interest rates to avert persistently high inflation, this would lead to higher borrowing costs and less room for maneuver in the future. The past also showed that financial injections had less impact on economic activity and the labor market as interest rates rose.