Global debt to reach 260% of GDP, predicts S&P Global Ratings

Washington: – An international financial institution, S&P Global Ratings, has forecast the global debt to reach 260% of the GDP and warned of an increase in defaulter companies on defaulters. S&P Global Ratings noted that the policies announced by various countries during the Coronavirus pandemic are the main reason for the rising debt burden.

Although the Coronavirus pandemic’s effects are still looming on the international community, some countries have registered an economic revival. The main reason for this is the extensive funding by the leading central banks and policies increasing the debt burden. As per the Institute of International Finance, the debt burden in the global economy has reached a level of $296 trillion in the first six months of 2021.

The debt burden increased by $36 trillion since the starting of the Coronavirus pandemic. Within three months, from April to June, the debt has increased by $4.8 trillion. It has been revealed that China has the highest share in the increasing debt. The Chinese debt burden has increased by $3.5 trillion during this period. As per the information revealed by the Institute of International Finance, the US debt burden has increased by $500 billion during this quarter.

Vera Chaplin, a senior official from S&P Global Ratings said that although the debt is increasing, the situation is not alarming, as the interest rates are low. At the same time, the economy would be not ultimately returned to its normal state unless mass-scale vaccination is completed around the globe.
As per the Institute of International Finance and the International Monetary Fund’s information, the global economy‘s debt burden could rise to $300 trillion by the end of 2021.