A recovery in global growth and a post-pandemic surge in inflation last year meant the global economy saw its first annual debt reduction since 2015, according to the study, which was closely monitored by a number of participants and agencies. A report released yesterday by the Institute of International Finance (IIF) estimates that global debt has fallen by about $4 trillion. dollars, dropping it below the mark of 300 trillion. dollars, exceeding the level of 2021. With the cost of borrowing rising, especially for emerging markets, the reduction was entirely at the expense of the richest countries, whose total debt fell by about $6 trillion. dollars to 200 trillion. dollars. In contrast, the stock of emerging global debt hit a new record high of $98 trillion. dollars.

However, again, the improvement was in developed markets, where the overall decline was 20 percentage points to 390% of GDP. The emerging market debt ratio increased by 2 percentage points to 250% of GDP, driven mainly by China and Singapore. Analyzing the numbers, the Institute of International Finance calculated that the ratio of developing countries’ public debt to GDP rose to almost 65% in 2022 from just under 64% in 2021. “The burden of external public debt of many developing countries has worsened due to sharp losses in the exchange rate of national currencies (in 2022) against the dollar,” the IIF said in a statement. This situation led to record low demand for bonds denominated in local currencies of emerging markets.

JP Morgan had a different take on global debt. In an analysis released yesterday, he pointed out that despite a modest reduction in developed-country debt last year, growth since and since the global financial crisis fifteen years ago has been far from modest. In fact, he estimates that advanced-country public sector debt as a percentage of GDP rose to 122% from 73% just before the crisis and over 30 percentage points of GDP in 13 of the 21 major economies and over 45% in nine countries. of them. What makes the nearly 50 percent jump even more remarkable is that debt only rose 40 percentage points in the 40 years leading up to the financial crisis, a time when there were also major shocks, including stagflation in the 1990s. 1970