Global debt hits $184 trillion

Global debt hits $184 trillion

Global debt hit a record $184 trillion in 2017, equivalent to more than $86,000 per person - more than double the average per-capita income. Overall, the amount of worldwide public and private debt is equal to about 225% of gross domestic product.

Borrowing is led by the U.S., China, and Japan, the three biggest economies, the International Monetary Fund said, highlighting potential risks to global expansion given that their share of debt exceeds that of output, Bloomberg reported.

The IMF debt figure is $2 trillion higher than the fund’s previous estimate released in October, adding end-2017 data.The agency uses data for 190 countries dating back to the 1950s.

The Chairman of the Board of the National Currency Association (NCA), Dmitry Piskulov, speaking to Vestnik Kavkaza, noted that such a level of debt load of individual states does not mean a near global economic crisis. "Debt or credit has always been an accelerator of economic growth. Debt repayment is a normal practice of attracting capital. In many countries, the debt-to-GDP ratio is higher than 100%, but it is not quite correct to consider the debt burden per person as debt obligations are usually refer to corporations or states, not to the population," he recalled.

“Uncontrolled debt growth, on the one hand, is a good thing, because national production is developing this way. On the other hand, uncontrolled debt growth is fraught with the fact that at some point investors may lose confidence in the debt of some country or corporation," Dmitry Piskulov said.

"At the same time, the U.S. and the eurozone can increase funding volumes at the expense of debts almost indefinitely, because they can print new currencies. Therefore, the threat of U.S. and eurozone default is low. At the same time, many eurozone countries are at a critical level, they have high government debt, poor bond servicing, investors do not want to buy their bonds, especially from the countries of Southern Europe - Italy, Spain, Portugal and Greece," the economist noted.


Vestnik Kavkaza

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