The IMF reported that overall public and private debt declined by 10 percentage points to 247% of global gross domestic product (GDP) in 2021 from its peak of 257% in 2020 in a blog published alongside its first Global Debt Monitor.
The “global debt rollercoaster,” or exceptionally significant fluctuations in debt ratios, were brought on by the economic recovery following COVID-19 and the ensuing quick rise in inflation, according to the IMF. Last year, both public and private debt in advanced economies fell by 5% of GDP, which was followed by comparable figures in emerging markets outside of China.
However, because of rising private debt in 2021, low-income nations saw their total debt ratios continue to rise, with total debt reaching 88% of GDP. Paulo Medas, who is in charge of the the IMF’s Fiscal Monitor, said debt levels in low-income countries were now at the highest levels since the debt relief of the 1990s and early 2000s.
There are growing concerns about the ability of low- and middle-income countries to repay their debts, with an estimated 25% of emerging market countries and over 60% of low-income countries either in or near debt distress.