As experts in the economy, we at Extreme Investor Network are constantly analyzing and monitoring global economic trends to provide valuable insights to our readers. Today, we want to bring your attention to a concerning issue that the world is facing: a staggering $315 trillion of debt.
According to the Institute of International Finance, this global debt wave is the largest, fastest, and most wide-ranging rise in debt since World War II, coinciding with the Covid-19 pandemic. Emerging markets have seen their debt surge to an unprecedented high of over $105 trillion, with countries like China, India, and Mexico being the biggest contributors.
While mature economies like Japan and the United States hold the majority of the $315 trillion debt, their debt-to-GDP ratio has been falling, indicating their ability to service their debts. On the other hand, emerging markets are facing a new high in debt-to-GDP ratio at 257%, posing risks to global funding costs.
Factors such as stubborn inflation, rising trade friction, and geopolitical tensions could further exacerbate the debt dynamics, putting pressure on global funding costs. Despite the health of household balance sheets providing some cushion against higher interest rates in the near term, government budget deficits remain high compared to pre-pandemic levels.
The $315 trillion debt stock consists of household debt, business debt, and public debt. Household debt stands at $59.1 trillion, business debt at $164.5 trillion (with the financial sector accounting for $70.4 trillion), and public debt at $91.4 trillion.
At Extreme Investor Network, we aim to provide unique and insightful analysis to help our readers navigate through the complex world of economics and finance. Stay tuned for more updates and expert opinions on the evolving global economic landscape.