WASHINGTON (Reuters) – Global debt hit a record $258 trillion in the first quarter of 2020 as economies around the world shut down to contain the coronavirus pandemic and debt levels continue to rise, said Thursday the Institute for International Finance in a report.
The IIF, which represents global banks and financial institutions, said the debt-to-GDP ratio in the first quarter jumped more than 10 percentage points, the largest quarterly increase on record, to a record high of 331%.
While rising debt levels were well below the average quarterly gains seen from 2015 to 2019, the pace of global debt accumulation by governments, corporations, financial institutions and households has accelerated since March. , did he declare.
Global gross debt issuance hit a “stunning” record of $12.5 trillion in the second quarter, compared to a quarterly average of $5.5 trillion in 2019, the IIF said. He noted that 60% of these problems come from governments.
“While rising debt levels raise concerns about debt sustainability, more than 92% of public debt is investment grade,” the report said.
Mature market debt exceeded 392% of GDP, up from 380% in 2019, with the rise in non-financial sector debt ratios most pronounced in Canada, France, Norway and the United States. US debt accounted for half of the total $185 trillion in debt in mature markets.
Debt-to-GDP ratios rose from 220% to 230% in emerging markets in the first quarter, but the US dollar value of debt fell from $700 million to $72.5 trillion, largely due to a depreciation of emerging market currencies against the US dollar, the IIF said.
He said China’s debt across all sectors was on track to reach 335% of GDP after rising to 318% in the first quarter from 302%, the largest quarterly increase on record. About 60% of the debt accumulation was due to non-financial businesses, he said.
The group said some $3.7 trillion in emerging market debt will mature through the end of 2020 and is expected to reach $4 trillion in 2021.
Reporting by Andrea Shalal; Editing by Leslie Adler