281 trillion dollars is the historical figure that the world debt has reached by the end of 2020 and the beginning of 2021. The coronavirus pandemic, together with the economic stimulus policies adopted by various governments worldwide, are the causes debt to skyrocket and continue to grow by leaps and bounds.
Members of the International Finance Institute (IFI), represented by the expert Emre Tiftik, point out that debt increased about 24 trillion dollars over the past year. This represented 8.4 trillion dollars more than what was stipulated by financial organizations, placing indebtedness at 355% of global GDP.
The entity points out that countries such as Spain, France and Greece are the ones that have committed the most to state loans. Likewise, countries like China have experienced their biggest increase in their debt-to-GDP ratio. Other emerging economies, such as Turkey, South Korea and the United Arab Emirates, also show worrying numbers. However, public debt is especially high in nations such as South Africa and India.
According to the IFI, governments that are experiencing the largest budget deficits will raise their debt by about $ 10 trillion by 2021. In In this sense, it is expected that for this current year an additional 92 trillion dollars will be added to the existing debt .
Despite the fact that vaccination processes against the coronavirus are increasingly advanced, and quarantines are becoming more flexible, economists believe that the tendency to increase indebtedness will continue if no action is taken on the matter. And it is that since 2018 it was determined that the world deficit was increasing in worrying numbers, going from 318% of GDP to 320% in just one year.
The private sector could be one of the most affected by this situation, since companies in this niche have increased their dependence on government support to avoid bankruptcy and defaults. However, economists like Khadija Mahmood emphasize that it is necessary for governments to propose a new strategy on a global scale for “these extraordinary fiscal measures.”
In this sense, experts recommend the withdrawal of stimulus measures to the economy . A plan that they must evaluate in order not to generate even more crisis in the financial sector. This is a recommendation also suggested by Mervyn King, former governor of the Central Bank of England, who believes that a debt crisis is looming in both Europe and the United States.
The conditions of the world economy, without a doubt, are exceptional due to the coronavirus pandemic . As debt numbers increase to worrying levels, US banks are also beginning to respond negatively to excess cash circulating on the streets as a result of over-issuance of dollars and financial aid. Faced with this reality full of uncertainty, it seems that alternative money is the one that is benefiting the most from this crisis, highlighting here bitcoin.
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