Reuters: Global Debt to Top Record $255 Trillion by Year's End

November 15, 2019

Article by Marc Jones in Reuters

Global debt is on course to end 2019 at a record high of more than $255 trillion, the Institute of International Finance estimated on Friday — nearly $32,500 for each of the 7.7 billion people on planet.

The amount, which is also more than three times the world’s annual economic output, has been driven by a $7.5 trillion surge in the first half of the year that shows no signs of slowing.

Around 60% of that jump came from the United States and China.

Government debt alone is set to top $70 trillion this year, as will overall debt (government, corporate and financial sector) of emerging-market countries.

“With few signs of slowdown in the pace of debt accumulation, we estimate that global debt will surpass $255 trillion this year,” the IIF said in a report.

Across sectors, government debt saw the biggest rise in the first half of the year, increasing by 1.5 percentage points, followed by non-financial companies, with a 1 percentage point rise.

Moreover, with state-owned companies now accounting for over half of non-financial corporate debt in emerging markets, sovereign-related borrowing has been the single most important driver of global debt over the past decade.

Separate analysis from Bank of America Merrill Lynch on Friday calculated that since the collapse of U.S. investment bank Lehman Brothers, governments have borrowed $30 trillion, companies have taken on $25 trillion, households $9 trillion and banks $2 trillion.

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