Global Debt Hits All-Time High in Second Quarter, Predicted to Reach 337% of GDP by Year-End

According to the Institute of International Finance (IIF), the world’s debt hit an all-time high in the second quarter. However, this surge has consequently caused the global debt-to-GDP ratio to reverse its previous trend of decline, which had been sustained for seven consecutive quarters. Now, it is expected to skyrocket to 337% by the year’s end.

This means that the world owes more money than ever before, and it’s stressing out the global economy.

#Global #debt spikes to record $307 trillion!!!$tip #tip @tipcoineth pic.twitter.com/bPWG1u4roO

— NO RARITY NFTs (@No_Rarity_NFTs) September 21, 2023

As we mentioned above, the world’s debt has hit a new all-time high, reaching a massive $307 trillion in the second quarter of 2023. This was a significant increase of $10 trillion in just the first half of the year.

Despite the expectation that higher interest rates would slow down borrowing, the debt continued to rise. The Institute of International Finance (IIF), which represents major banks and financial institutions globally, shared this alarming data.

Understanding the Rise in Global Debt Levels and Its Contributing Factors

The surge in global debt can be attributed to countries spending more than they are generating in revenue, resulting in significant budget deficits. Moreover, economic growth has decelerated, and inflation is not increasing as rapidly as it did previously. Interestingly, the reduction in the debt ratio observed in the last two years was due to a rapid rise in prices. However, the current economic landscape has shifted, causing a change in this trend.

Global GDP: $100 trillion

Global debt: $300 trillion

Entire world is in debt trap of banksters, who print money out of thin air and make others work for it.

Biggest hoax perpetrated on humanity ever.

— S.L. Kanthan (@Kanthan2030) September 21, 2023

It is important to note that developed countries are responsible for over 80% of the overall increase in global debt. Notably, nations such as the United States, where the federal debt has exceeded $33 trillion, as well as Japan, the United Kingdom, and France, have seen the biggest spikes in debt. Even the largest emerging economies, such as China, India, and Brazil, have experienced a significant increase in their debt levels.

As interest rates rise and debt levels increase, it becomes more challenging for governments to manage their interest expenses. In the United States, interest rates are expected to stay high for a while, which can limit investments in emerging markets.

Positive News: Lower Household Debt in Advanced Economies

On the bright side, the Institute of International Finance (IIF) pointed out that household debt is at its lowest level in developed economies in twenty years. This means that people in these countries owe less than their income and assets. If inflation continues to be a concern in these mature markets, having low household debt can help.

It acts like a protector because it means people can handle higher interest rates without too much financial stress, especially in the U.S. So, despite the challenges with rising global debt, there are some positive aspects to consider.