Global debt to soar to 98% of GDP by 2020, IMF says

Global public debt to GDP stood at 98% at the end of 2020, at levels not seen since the end of World War II, as a result of huge public spending to counter the effects of the pandemic crisis, the International Monetary Fund (IMF) said on Thursday.

At the end of 2019, just before the outbreak of the coronavirus pandemic, global debt to GDP was 84%.

"Advanced economies recorded the largest increases in fiscal deficits and debt, reflecting both rising spending and falling revenues," Vitor Gaspar, director of the Fund's Fiscal Affairs Department, explained as he presented the report.

In the US, the world's largest economy, debt-to-GDP rose to 129% in 2020, up from 108% at the end of 2019, and is expected to climb to 133% in 2021.

In total, global fiscal support reached almost $14 trillion at the end of December last year.

"Fiscal support, which is essential for households, businesses and the recovery, needs to be maintained but adjusted to the evolution of the pandemic and the economy, as well as to facilitate the necessary structural transformation," stressed the agency led by Kristalina Georgieva.

Georgieva said Tuesday that the recovery of the global economy, hard hit by the covid-19 pandemic, must be "green and inclusive" or it will not be able to overcome the crisis caused by the pandemic.

During her intervention in a virtual debate at the World Economic Forum, the head of the Fund stressed that the world economic growth forecast has been revised upwards to 5.5 % in 2021, three tenths more than anticipated in October, thanks to the expectations of recovery due to vaccination and additional fiscal support in the United States (US) and Japan.