Public debt rose 19 percentage points of GDP, in 2020, an increase like that seen during the global financial crisis, over two years: 20. In advanced economies, fiscal deficits soared as countries saw revenues collapse due to the recession and put in place sweeping fiscal measures as COVID-19 spread. Looking at overall trends, we see two distinct developments. But most developing economies are on the opposite side of the financing divide, facing limited access to funding and often higher borrowing rates. These countries were able to expand public and private debt during the pandemic, thanks to low interest rates, the actions of central banks (including large purchases of government debt), and well-developed financial markets. Advanced economies and China accounted for more than 90 percent of the $28 trillion debt surge in 2020. The accumulation of public debt since 2007 is largely attributable to the two major economic crises governments have faced-first the global financial crisis, and then the COVID-19 pandemic.ĭebt dynamics, however, differ markedly across countries. Public debt now accounts for almost 40 percent of total global debt, the highest share since the mid-1960s. Private debt, on the other hand, rose at a more moderate pace from 164 to 178 percent of GDP, in the same period.
The debt surge amplifies vulnerabilities, especially as financing conditions tighten.ĭebt increases are particularly striking in advanced economies, where public debt rose from around 70 percent of GDP, in 2007, to 124 percent of GDP, in 2020.
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