The International Monetary Fund warned of the possibility of global debt rising again despite its decline in 2022, due to high rates of economic growth and a stable inflation rate in addition to the continued issuance of bonds in China.
The International Financial Corporation stated that global public and private debt amounted to 238 percent of global gross domestic product last year, an increase of 9 percent compared to 2019.
According to a recent report by the International Monetary Fund, global debt reached $235 trillion by the end of 2022, about $200 billion more than its level in 2021.
“Global debt appears to be returning towards a historical rising trend and it will be necessary to manage debt vulnerabilities,” the Fund said.
The IFC called on governments to take urgent steps to reduce debt vulnerabilities through “vigilant monitoring” of the level of private debt, and establishing “trustworthy” financial frameworks to manage the sustainability of public debt.
Despite the recovery in economic growth since 2020 and inflation significantly higher than expected, according to the financial institution, public debt has remained stubbornly high.
The fiscal deficit kept public debt levels high, with many governments spending more to boost growth and respond to rising food and energy prices even as they ended pandemic-related fiscal support, according to the International Monetary Fund.
