The IMF reports that global debt dropped for the second year in 2022, yet, it remains higher than before the pandemic.In 2022, this debt equaled 238% of the worlds GDP.
Thats a 9% rise from 2019 levels.
The debt total reached US$235 trillion in the same year.Many governments increased their spending.
They aimed to boost growth and tackle rising food and energy costs.Despite this, the overall debt load still surpasses pre-pandemic figures.Global Debt Still High, Says IMF.
(Photo Internet reproduction)IMF economists are urging quick action.
They call for reducing risks tied to high debt levels.
A strong commitment to managing debt is key for the future, they say.The United States leads in debt with US$70 trillion owed.
China follows with US$47.5 trillion.
Both countries have similar debt as a share of their GDP.The report adds that China has boosted global debt quickly in recent years.
On the other hand, debt in developing countries also went up, but from a lower base.BackgroundThe IMF has been monitoring global debt for years.
This data is vital for economic policy and investment decisions.Its not just governments, but also corporations and households that contribute to this debt.
Before 2008, global debt was relatively manageable.The financial crisis that year changed that.
Governments had to spend more to save their economies.Rising global debt is not just a Western issue.
Emerging markets are also borrowing more.This could make them vulnerable to economic shocks.
High debt also limits how much governments can invest in social services like healthcare and education.The IMFs warning isnt new.
They have been urging debt control for several years.
This is particularly important for countries that rely heavily on exports.A sudden drop in demand can make debt levels unsustainable quickly.
These insights aim to prompt quicker actions by policymakers.