Global debt stabilized at just above 235% of world GDP last year as declining private-sector lending offset increased government borrowing, maintaining total debt at $251 trillion, according to the IMF‘s press-release. According to the fund’s Global Debt Database, private debt fell to under 143% of GDP, the lowest level since 2015, driven by reduced household liabilities and flat corporate borrowing. Public debt rose to nearly 93% of GDP as governments continued spending on pandemic legacy costs and rising interest payments. The September 17 update shows total debt remained essentially unchanged despite shifting composition between public and private sectors.
Notable differences emerged across countries and income groups behind these global averages. US government debt climbed to 121% of GDP while China’s public debt reached 88%, up from 82% the previous year. Excluding the US, advanced economies saw public debt fall by over 2.5 percentage points to 110% of GDP as increases in France and the UK were offset by declines in Japan, Greece, and Portugal.
Private debt trends varied dramatically by country. The United States recorded a significant 4.5 percentage point drop to 143% of GDP, while China’s private debt jumped 6 points to 206% of GDP. Among emerging markets, private borrowing surged in Brazil, India, and Mexico but fell in Chile, Colombia, and Thailand. The persistently high global fiscal deficit averaging around 5% of GDP continues driving public debt higher through pandemic-related subsidies and social benefits.
he decline in private debt reflects different factors depending on the country. Many advanced economies see companies borrowing less due to weak growth prospects, while strong balance sheets reduce US corporate borrowing needs. Rising public debt alongside falling private debt suggests crowding-out effects where heavy government borrowing limits private credit availability.
