by Karen Faulkner, Worthy News Correspondent
(Worthy News) – The Institute of International Finance (IFF) has issued a quarterly report showing that global debt has surged by over $15 trillion since 2019, reaching a massive new record of over $272 trillion in Q3 2020. The IFF also reports that, while there has been a dramatic increase since the COVID-19 pandemic, there has also been an “unprecedented” build-up of debt over the last four years, with global debt rising by $52 trillion since 2016.
Responding to the report, Zero Hedge economic analyst Tyler Durden notes that the biggest increases in non-financial sector debt this year were seen in the US, Canada, and Japan. Government debt has been the main driver of the increase, and this has been most noted in Canada, Japan, the US, the UK, and Spain.
According to Durden, the IFF findings point to a world that is “careening toward either the spectacular deflationary supernoava of a debt collapse, or a hyperinflationary explosion that will need to sweep away hundreds of trillions in debt in the next few years.”
Durden sets out the additional principal findings in the IFF report as follows:
“Global debt is expected to hit $277 trillion (365% of GDP) by the end of 2020; Debt outside the financial sector on track to hit $210 trillion (274% of GDP) this year—up from $194 trillion (240%) in 2019; Emerging market debt (ex-financials) is fast approaching 210% of GDP—up from 185% in 2019 and 140% a decade ago; Sharply declining revenues have made debt service much more onerous for EM governments—despite low borrowing costs; Some $7 trillion of emerging market bonds and syndicated loans come due through end-2021, 15% of that in U.S. dollars.”
The IIF estimates that around $7 trillion of EM debt will come due through the end of 2021, with USD-denominated debt representing 15% of the total.
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