Global debt remains well above pre-pandemic level, continues to rise

The International Monetary Fund (IMF) said the overall global debt still remained well above pre-pandemic levels despite the biggest annual drop in 70 years in 2021. In dollar terms, global debt continued to rise, although at a much slower rate, reaching a record USD235tr last year. Paulo Medas, who oversees the IMF’s Fiscal Monitor, said debt levels in low-income countries were now at the highest levels since the debt relief of the 1990s and early 2000s. IMF fiscal affairs director Vitor Gaspar, Medas and senior economist Roberto Perrelli warned it would become increasingly difficult to manage the high levels of debt if the outlook continued to deteriorate and borrowing costs rose further. They said governments should pursue fiscal policies that help reduce inflationary pressures now and debt vulnerabilities over the long term while continuing to support the most vulnerable.