{"id":593,"date":"2018-05-10T06:52:07","date_gmt":"2018-05-10T06:52:07","guid":{"rendered":"http:\/\/www.development-work.com\/mydebt\/?p=593"},"modified":"2020-10-27T06:56:00","modified_gmt":"2020-10-27T06:56:00","slug":"the-world-piled-under-debt","status":"publish","type":"post","link":"https:\/\/www.mydebtacademy.com\/debt-management-plan\/the-world-piled-under-debt\/","title":{"rendered":"The World Piled Under Debt"},"content":{"rendered":"

Well, it happened again, folks!<\/p>\n

Global debt levels, hitting a record high, seems old news now because of the ever-increasing numbers every year, but this pace is still as fatal as it was all these years. Ready to go out of control anytime.<\/p>\n

Is there any end to this mayhem?<\/p>\n

Seems not, as according to the Institute of International Finance (IIF), the global debt levels have grown by an additional $21 trillion last year (US dollars), leaving total outstanding debt at $US237 trillion.<\/p>\n

Yes, you heard it right, the highest level on record.<\/p>\n

Near the end of 2016, all sectors witnessed a hike in debt loading, shooting up to $4.5 trillion for households, $6.5 trillion for non-financial corporates, $4.5 trillion for governments, and $5.5 trillion for the financial sector, respectively.<\/p>\n

\"Piled<\/p>\n

Image Source: Businessinsider.com<\/u><\/em><\/p>\n

Global levels of debt across all sectors rose by staggering $21 trillion last year, accounting for over 80% of the total $25 trillion increase since 2012.<\/p>\n

As you can see in the chart below from the IIF, the majority of $25 trillion increase over the time-span of five years irrupted in emerging markets, bulging from $42 trillion to $63 trillion.<\/p>\n

\"\"<\/p>\n

Image Source: Businessinsider.com<\/u><\/em><\/p>\n

On the contrary, the total debt increase in mature markets is from $4 trillion to $174 trillion over the same period of time.<\/p>\n

However, the overall debt levels increased drastically last year, it was actually lower than the increase recorded in nominal GDP. This is where things went a little downhill, as the global debt-to-GDP ratio fell to 318%.<\/p>\n

In accordance with the IIF, if the world GDP growth continues to run above potential, then the debt-to-GDP ratio continues to decline.<\/p>\n

With world financial conditions still relatively gentle, the risks of a quick increase in the debt burden tend to stay on the very first page.<\/p>\n

From the time period of 2012 to 2017, the debt-to-GDP ratio for mature markets fell from 387% to 382%, moderately offsetting a jump in the ratio for budding markets which surged to 210% from 171% over the same period of time.<\/p>\n

Following the statement by IIF, Argentina, Turkey, Nigeria, and China have set the record of largest debt ratios build-up over the year, all thanks to the ongoing growth in indebtedness of households and the finance sector of the nation.<\/p>\n

While the upcoming market debt continues to be offered in local currencies, the foreign currency denominated debt issued in these nations has been increased from $800 billion last year to a new record of $8.3 trillion.<\/p>\n<\/div>