Amid the global efforts to mobilize funding for initiatives aimed at finding solutions to the global health and economic crisis as a result of the impact of COVID-19, global debt profile has reached a record $226trillion.
The latest update of the International Monetary Fund (IMF)’s Global Debt Database published on Wednesday showed global debt grew by about 28 percentage points to 256 percent of global gross domestic product (GDP) in 2020.
The Fund said 2020 accounted for the largest one-year debt surge since World War II, as the world was devastated by a global health crisis that triggered a deep recession in most economies.
On Tuesday, Nigeria, which has managed to keeps its heads above economic waters since recovering from the worst recession in its economic history, said its latest debt figures rose above N38 trillion, or $92.626billion as at the third quarter ended September 30,2021.
The new figure climbed from about N35.5 trillion, or $86.57 billion recorded as of June 30, 2021.
Although debt was already high prior to the outbreak of the global pandemic, the situation apppears to have worsened, as public and private debt has since skyrocket, with governments at all levels mobilising funding for economic recovery initiatives.
Amid new variants of the virus and spiraling inflation, the IMF said borrowing by governments has become the norm, accounting for more than half of the rising debt portfolio.
The Fund said the global public debt ratio is currently at a record 99 percent of GDP, while private debt from non-financial institutions and households have also shot up to new highs.
The IMF said the bulk of the debt increases were in developed economies, where public debt jumped from about 70 percent of GDP, in 2007, to 124 percent of GDP, in 2020.
Similarly, private debt grew at a more moderate pace from 164 percent to 178 percent of GDP, in the corresponding period.
Further details from the report revealed that public debt now accounts for almost 40 percent of total global debt.
However, most developing economies are facing the challenge of limited access to funding and high interest rates for borrowing.
The Fund said has observed two emerging trends worthy of a closer attention.
One od those trends the IMF observed was that in advanced economies, fiscal deficits grew as countries experience dwindling revenues as a result of the recession and the sweeping fiscal measures to prevent COVID-19 spread.