Jakarta, CNBC Indonesia – The Institute for International Finance (IIF) warned of a ‘debt tsunami attack’ following the coronavirus crisis that pushed global debt levels to new highs, over US $ 272 trillion (IDR 3,859 quadrillion, assuming IDR 14,190 / US $), in the quarter III (Q3) 2020.
The agency said global debt would break new records in the coming months reaching US $ 277 trillion (Rp 3,930 quadrillion) by the end of 2020. This would represent a debt-to-GDP ratio of 365%.
“Driven by a sharp increase in government and corporate borrowing as the Covid-19 pandemic continues, the global debt burden increased by US $ 15 trillion in the first three quarters of 2020 and is now above US $ 272 trillion,” said IIF in its latest Global report. , Debt Monitor which was released on Wednesday (11/18/2020).
The increase in debt occurred after governments around the world increased stimulus support for companies and communities in the face of this global pandemic. Not a few businesses have had to look for alternative funding because their activities stopped after the emergence of Covid-19.
Both events translate into higher borrowing, leading to more recorded debt.
Among developed economies, debt surged above 432% of GDP in the third quarter, or a 50% increase from 2019. The United States, which has implemented one of the world’s largest stimulus packages, accounted for nearly half of this increase.
In the eurozone, government actions led to an increase in public debt of US $ 1.5 trillion over the same period, reaching US $ 53 trillion. However, this figure is still below the US $ 55 trillion debt that emerged in the second quarter of 2014, when the region was facing a sovereign debt crisis.
Meanwhile in emerging markets, debt levels rose to more than 248% of GDP, with Lebanon, China, Malaysia and Turkey experiencing the largest increases in non-financial sector debt.
However, the Corona virus pandemic is not the only factor causing large global debt.
“The pace of global debt accumulation has been unprecedented since 2016, increasing by more than US $ 52 trillion,” said IIF.
“While about US $ 15 trillion of this surge has been recorded in 2020 amid the Covid-19 pandemic, the debt buildup over the past four years has far outpaced the US $ 6 trillion increase over the previous four years.”
A higher level of debt places governments, companies and households at higher risk during an economic downturn because they are required to pay off these debts.
Last October, the World Bank also released the latest report on international debt statistics (International Debt Statistics) 2021. In this release, this institution reported a row of low-middle income countries with the largest foreign debt in the world.
This data is taken from 2009, 2015, 2016, 2017 and 2019. The country with the largest debt in 2019 is China, where the amount is US $ 2.1 trillion. Next there are Brazil (US $ 569.39 billion), India (US $ 560.03 billion), Russia (US $ 490.72 billion), and Mexico (US $ 469.72 billion).
Then Turkey (US $ 440.78 billion), Indonesia (US $ 402.08 billion), Argentina (US $ 279.30 billion), South Africa (US $ 188.10 billion), and Thailand (US $ 180.23 billion).
Meanwhile, the government said the debt only included developing countries and not developed countries. So there is no comparison.
(Head / head)
– .
