by Karen Faulkner, Worthy News Correspondent
(Worthy News) – The Institute of International Finance (IIF) has announced that global debt reached a new record high of $296 trillion in the second quarter of 2021, with total debt rising by $36 trillion in the 18 months since the pandemic began, Zero Hedge reports. Global debt includes government, household, corporate, and bank debt but not derivatives and other exotic products.
The increase in global debt was the steepest in emerging markets, Zero Hedge reports. China’s debt rose by $3.5 trillion in the second quarter to nearly $92 trillion. The emerging-market aside from China saw its debt rising to a new record high $36 trillion in the second quarter; the spike is a result of government borrowing.
“If the borrowing continues at this pace, we expect global debt to exceed $300 trillion,” Emre Tiftik, IIF’s director of sustainability research, said in a statement.
Nevertheless, as economic growth rebounded, the debt-to-GDP ratio declined for the first time since the start of the pandemic, Zero Hedge reports. According to the IFF, 51 countries saw a decline in debt-to-GDP levels, largely because of a strong economic rebound.
Therefore, debt as a share of gross domestic product fell from a record high of 362% in the first quarter of 2021 to around 353% in the second quarter, Zero Hedge reports.
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