Global debt reached an all-time high, exceeding $305 trillion in the first quarter of the year, driven by the rise in debts of China and the United States.
According to the report published by the Institute of International Finance (IIF), the global debt price increased by $3.3 trillion in the first quarter of the year to $305.3 trillion.
The global debt price, which reached a record level in this period, was calculated as 293.4 trillion dollars in the same period of last year.
THE INCREASE IN THE DEBTS OF CHINA AND THE USA WAS EFFECTIVE
With the increase in global debts in the first quarter of the year, the increase in the debts of China and the USA was effective. During the period in question, the total amount of debt in the Euro Zone decreased for three consecutive quarters.
The ratio of global debt to gross domestic product (GDP), which reflects the increase in inflation, carried its decline to the fourth month, while the ratio of global debt to total GDP of countries was approximately 348 percent.
At this rate, global debt was about 15 points below its peak in the first quarter of 2021.
DEBT OF DEVELOPING COUNTRIES IS APPROXIMATELY TO 100 TRILLION DOLLARS
Looking at the distribution of global debt, household debts amounted to 57 trillion dollars as of the first quarter of the year, debts related to non-financial companies were 90.6 trillion dollars, public debts were 88.3 trillion dollars and debts related to financial companies such as banks were 69.4 trillion dollars.
When their ratio to total GDP is taken into account, debts related to households decreased from 66.9 percent to 63.9 percent and debts related to non-financial companies to 98.8 percent from 102.5 percent in the first quarter. In the same period, public debts decreased from 106.7 percent to 103.2 percent and debts related to financial companies decreased from 87.3 percent to 82.5 percent.
While the total debt of advanced economies was 206.7 trillion dollars in the first quarter of the year, the total debts of emerging economies such as India, China, South Africa, Brazil and Turkey amounted to 98.6 trillion dollars.
PUBLIC DEBT INCREASE IN TURKEY
In Turkey, when the ratios of debts to GDP are taken into account, household debts decreased by 3.4 points to 14.2 percent in the first quarter of the year compared to the same period of the previous year, while debts to non-financial companies increased by 2.2 points to 74.4 percent and public debts to 3.4 percent. points increased to 44 percent. In Turkey, debts related to financial companies such as banks increased by 3.6 points to 33.7 percent in this period.
GLOBAL DEBT DYNAMICS EXPECTED TO BE Worsened
In the report, it was noted that while the fluctuating effects of the Russia-Ukraine War continue to disrupt global economic activity, growth is expected to slow down significantly this year and this will have negative effects on debt dynamics.
It is reported that the expected slowdown due to tight lockdowns in China and tighter global funding requirements will likely limit or even reverse the downward trend in debt ratios.
High borrowing costs will exacerbate debt vulnerabilities as central banks continue to tighten to rein in inflationary pressures, the report said.