Tony Chukwunyem with agency report Global debt levels declined for the first time in 2½ years in the first quarter, driven by a fall in developed markets, but indebtedness across developing economies hit a fresh record, the Institute of International Finance (IIF) said yesterday. According to the institute, total global debt fell by $1.7 trillion to $289 trillion with financials accounting for nearly half of that decline, while government indebtedness continued to increase.
In contrast, emerging market debt levels rose by $600 billion to a fresh record high of over $86 trillion, though at a significantly slower pace the previous three quarters. This was due to a slower rise in emerging government debt largely due to fiscal constraints. Reuters quoted Emre Tiftik, IIF’s director of sustainability research, as saying: “Emerging markets simply have relatively less fiscal capacity.
With EM government debt broadly stable, the non-financial corporate and financial sectors have been the main drivers of the debt buildup.” Despite lower global debt levels, debt ratios continued to rise as economies struggled to recover to pre-pandemic levels in many parts of the world.
