COVID-19 has Caused A Massive Surge in Global Debt
September 18, 2020
In an effort to combat the economic fallout from the coronavirus, governments and central banks around the world have enacted massive stimulus policies and changed to monetary policy. While these policies have helped stabilize the global economy and helped the citizens of each respective nation, the world now faces unprecedented levels of debt.
The ratio of global debt to GDP surged to an all-time high in the first quarter of the year, according to data from Bank of America. Overall debt for the non-financial sector is now worth 252% of global GDP. This is up from 241% at the end of last year, marking the biggest single-quarter increase on record.
Potentially more worrying is that this is just based on data from Q1, but many Western countries did not begin their lockdowns and ensuing stimulus until the second quarter, meaning we could see an even bigger jump once Q2 data is available.