Some $21 trillion was added to the global debt in 2017, making it touch an all-time high of $237 trillion. In Rupee terms, it turns out to be ‘15,40,20,00,00,00,00,000’ (or, Rs 15.4 crore crore).
As low global rates continue to support unprecedented levels of debt accumulation, global levels of debt across all sectors rose by $21 trillion last year leading to total debt accumulation of $237 trillion, Institute of International Finance (IIF) said in a report. The $21 trillion addition in 2017 accounts for more than 80% of the total $25 trillion increase since 2012.
While among emerging economies, Argentina, Nigeria, Turkey, and China have seen the biggest rise in debt-to-GDP ratios (despite strong growth), India is among countries facing high refinancing risks.
“Over $2.9 trillion of EM debt (bonds and syndicated loans) will be maturing through end-2019, with USD redemptions accounting for some 27% of the total. Countries with a relatively heavy burden of upcoming USD redemptions in 2018/19 include China, Russia, Brazil, Korea and India,” IIF said in the report.
However, the global growth pick-up has brought little respite. “Despite a sharp buildup in the stock of global debt in 2017, the cyclical pickup in global growth and still-benign global financing conditions have helped bring debt ratios down slightly,” the global association of 38 banks said.
What’s interesting to note here is that China, which has put in a lot of effort to bring down its debt risks, managed to slow its debt down in 2017 with a drop in the non-financial corporate debt-to-GDP ratio by some 6 percentage points to 160% of GDP but it was offset by rising household and financial sector debt to a large extent.
Amon mature economies, while Ireland, Denmark, and the Netherlands witnessed sharp reductions in debt-to-GDP last year, France and Switzerland, on the contrary, added debt. In France, IIF said, the overall consumer and business sentiment is hovering near post-crisis highs with household and non-financial corporate sector debt hit an all-time of 59% and 134% of GDP respectively.
In the United States, at around $14.5 trillion in 2017, non-financial corporate sector debt was $810 billion higher than it was a year ago, with 60% of the rise stemming from new bank loan creation.