The largest decline in the last 70 years was recorded global debt during 2021, although it remained above pre-pandemic levels. According to the latest updated data IMFglobal debt has fallen by 10 percentage points from the record set in 2020 amid the first waves of the pandemic. Today it is 247%. global GDP. However, in dollar terms, it is still growing, but at a slower pace and reached 235 trillion last year. dollars and remains in second place in history. However, its decline reflects the recovery of the global economy from the recession of the pandemic.

As the IMF points out, an analysis of individual elements of global debt shows that many countries are still reeling from the effects of the pandemic. As the global economy plunged into recession in 2020 due to the pandemic and lockdowns, debt skyrocketed as a percentage of the economy, followed by budget deficits as governments tried to prop up businesses and households by increasing spending. As the economy recovered, inflation accelerated as supply fell short of huge demand, and food and energy prices soared due to war and the climate crisis. But a recovery in 2021, combined with steadily accelerating inflation, has led to more than 10 percentage points of debt reduction in the US, Brazil, Canada and India.

After all, according to IMF estimates, this reduction in debt due to accelerated growth will not continue. The IMF estimates that at least 1/3 of the global economy will contract for two consecutive quarters both this year and next, meaning it will be in recession. By 2026, global GDP losses are expected to reach $4 trillion. US dollars According to the Fund’s economists Vitor Gaspar, Paulo Mendas and Roberto Perelli, “managing high levels of debt will become especially difficult if the economy continues to deteriorate and borrowing costs continue to rise.”