China and US Lead Global Debt Levels; Poorer Nations Face Risks
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China and the US remain two of the leading countries with the highest debt-to-GDP ratios. Emerging economies and low-income economies are most affected by debt vulnerabilities.
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The global debt-to-GDP ratios were on a decades-long rising trend before the pandemic. China has been a central figure in the increase of global debt in recent decades.
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Among emerging economies, 25% are at high risk of facing “default-like” spreads on their sovereign debt. Among low-income economies, 15% are in debt distress, plus 45% at high risk.
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As per the IMF, emerging and low-income economies need around $440 billion in extra financing from 2022-2026 to quicken income convergence with advanced economies.
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The top banks based out of some high-debt countries like Japan, Singapore, and Italy are working to expand lending and support economic growth.