IMF sounds global debt alert

IMF sounds global debt alert

Public and private debt worldwide reached $ 164 trillion at the end of 2016, or 225 percent of the world’s gross domestic product (GDP), according to figures released by the International Monetary Fund (IMF) on Wednesday.
The world | 19.04.2018 at 06:50 • Updated 19.04.2018 at 11:14 | By Marie de Vergès

A global outburst … The public and private debt in the world – excluding the financial sector – reaches unprecedented levels: a total of 164 000 billion dollars (132 500 billion euros) recorded at the end of 2016, or 225% of the product gross domestic product (GDP), according to the figures in the report Fiscal Monitor of the International Monetary Fund (IMF), published Wednesday, April 18.
Since 2007, the year that triggered the great financial crisis, this burden has increased by 40%. Three countries (United States, China, Japan) concentrate more than half of this vertiginous sum. But the phenomenon spares no region of the world. The largest stock is the preserve of advanced economies as a result of stimulus packages to fight the 2008-2009 recession. The public debt – which is the main burden for rich countries – has stabilized for five years beyond 105% of GDP, an unprecedented ratio since the Second World War.
Taking advantage of a very high growth for thirty years, emerging countries have long kept control of their public finances. But times have changed. These economies have been the main contributors to the increase in global debt over the past decade. China alone contributed nearly half.

The group of developing countries is no exception to this runaway with a public debt that exceeds, on average, 40%, an increase of more than 10 percentage points since 2012. This level is lower than the peaks already reached in recent history. But the risks of slippage are high in countries that mobilize little tax revenue. In Africa there has been extensive debt cancellation or restructuring. “We must take advantage of the economic recovery to accumulate financial reserves in anticipation of the stormy weather that will end …

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