World’s Debt To Increase In 2021:
The Institute of International Finance (IIF) has reported that the world has never been more indebted before and the debt will further rise in the year 2021 with more borrowing ahead amid the covid-19 led economic crisis.
Key Findings of IIF:
- As per the IIF, governments, companies, and households have raised $24 trillion in 2020 in order to offset the economic toll.
- This has resulted in an all-time high increase in global debt.
- As of year, 2020, the World’s debt stands at $281 trillion.
- This accounts for more than 355 percent of global GDP.
- The IIF further stated that this debt will increase as a result of more borrowings.
- IIF also estimates that governments are facing the challenge of big budget deficits.
- This will increase by another $10 trillion in the year 2021 since the political and social pressures push for more spending.
- This in turn will increase the debt load past $92 trillion by the end of 2021.
- IIF also states that both mature and emerging markets will look for a perfect balance.
- The economic recovery may push the governments to start developing strategies in order to roll back the stimulus. This could increase the default and bankruptcy risk.