Dhe Corona crisis and the related government aid measures have caused world debt to climb to a record high. As the banking association Institute of International Finance (IIF) announced, these amounted to $ 258 trillion at the end of March. This corresponds to 331 percent of the annual economic output, ie the “gross domestic product” (GDP) of the global economy. At the end of 2019, this indicator was 320 percent, down 11 percentage points.
Debt is likely to have increased again in the second quarter. According to the IIF, bond issuance between April and late June was $ 12.5 trillion – by far the highest quarterly value to date. The quarterly average for 2019 was $ 5.5 trillion. To date, governments have adopted relief efforts to cushion the $ 11 trillion quarantine recession. Another $ 5 trillion is planned, the IIF writes.
Almost two thirds of the increase in debt in the first quarter is accounted for by companies. In the financial sector, debt has increased by $ 8 trillion to $ 64 trillion since 2016, while the remaining companies increased their liabilities by $ 12 trillion to $ 75.5 trillion over the same period. Due to the abundant liquidity thanks to the bond purchase programs and other rescue measures by the central banks, the IIF expects an accelerated increase in corporate debt.
While government debt in industrialized countries reached almost 113 percent of GDP at the end of March, it was almost 54 percent in emerging markets. But here the corporate debt is 96 percent higher than in the industrialized countries at 93 percent.