Global debt rose to an all-time high last year, the Institute of International Finance reports. In total, companies, households and governments have outstanding loans worth USD 303 trillion (EUR 268,000 billion). That was an increase of $10 trillion a year earlier.
The debt burden rose less rapidly in the second corona year than in the first year of the crisis. In 2020, the debt burden increased by $33 trillion. More than 80 percent of new debt came from emerging markets. These countries account for nearly $100 trillion of the total, according to the IIF, which represents the interests of hundreds of banks and financial funds.
Global debt soaring in 2020 was due to governments spending huge amounts of money to help their economies through the crisis, bail out companies and keep people in work. This year there has been a slowdown in debt build-up. But the level of debt remains high despite the IIF. The economic recovery and high inflation have improved the picture somewhat.
Historic highlight
Global debt fell last year from an all-time high of more than 360 percent of global gross domestic product in 2020 to 351 percent in 2021. Last year’s rate is about 28 percentage points above pre-pandemic levels.
The issuance of sustainable, responsible and socially labeled (ESG) debt has boomed as investors plunged into sustainable debt markets. ESG-certified issuance reached a record $1.4 trillion, almost double the pace in 2020. Total ESG debt, at about $3.4 trillion, makes up just 1 percent of global debt, it said. IIF.
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