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Experts warn of threatening global debt

MOSCOW, 23 Feb – PRIME. Over the next one and a half years, the volume of global debt could grow by $ 19 trillion and by mid-2022, for the first time in history, exceed $ 300 trillion. This is reported by RT with reference to information from the American Institute of International Finance. According to this organization, the total debt of governments, businesses and the population of the countries of the world increased sharply in 2020 amid the COVID-19 pandemic and is now almost 3.5 times the size of the global economy. At the same time, in order to recover from the consequences of COVID-19, countries will need additional cash injections and new loans, experts say. Global debt is growing: in which countries a default is possible in 2021 Against the backdrop of the consequences of the coronavirus pandemic, the size of world debt will continue to grow at a high rate in the coming years. So, over the next one and a half years, the figure may additionally increase by $ 19 trillion. This was stated by specialists from the American Institute of International Finance (IIF). “We estimate that over the next 15-18 months the amount of global debt will exceed $ 300 trillion,” said Emre Tiftik, director of research for sustainable development at IIF. World debt represents the total debt of the population, companies, financial institutions and governments of all countries. As previously calculated by IIF experts, in 2020, the figure increased by $ 24 trillion at once and for the first time during the entire observation period reached $ 281 trillion. Today the corresponding amount is more than 3.5 times the size of the global economy. “In 2020, the ratio of world debt to GDP increased by 35 percentage points and amounted to more than 355% of global GDP. The growth of this indicator was significantly higher than during the global financial crisis of 2008,” the organization said in a study. More than half of the increase in the indicator fell on public debts. So, in 2020, the volume of borrowings from governments increased by $ 12 trillion – to $ 82 trillion (105% of world GDP). Chairman of the CPC Renovation Mikhail Dorofeev, in turn, said that “against the backdrop of falling consumer spending and investment activity as a result of the COVID-19 pandemic, the governments of many countries were forced to sharply increase government spending. In this way, aggregate consumption could be supported and mitigated. the consequences of the crisis. The sources of financing for these expenses are just reserves and borrowings. ” According to the estimates of the International Monetary Fund (IMF), under the influence of the COVID-19 pandemic in 2020, the volume of world GDP decreased by 3.5%. According to the organization’s forecast, in 2021 the global economy will recover and grow by 5.5%, and in 2022 – by 4.2%. Meanwhile, maintaining stable growth rates will require additional cash injections and debt buildup, says Mikhail Dorofeev. He noted that “the world central banks went to a sharp cut in key rates and the buyout of assets from the market. As a result, the conditions for refinancing current debt or its increase have become extremely attractive for the corporate sector and the population.” According to the IIF forecast, in 2021, government debt could increase to $ 92 trillion. The need to service growing public debts will significantly increase the burden on countries’ budgets. In such conditions, the world economy will be much more vulnerable to possible future crises, experts of the organization believe. Anastasia Uskova, General Director of the Rocket Work platform, believes that, in fact, “the world economy now exists on credit. Debts are three times higher than the real volume of production and sale of goods and services. In order for the bubble not to burst, further infusions of money are needed. including taken through new loans. “Bill Gates made a disappointing forecast for the development of the pandemic” ECONOMIC STRATEGY “Today, the most significant debt burden is experienced by the United States (372% of GDP), the countries of the eurozone (422%), Great Britain (506%) and Japan (557%). In addition, South Korea also has high volumes of debt (363%). It is noteworthy that against this background, the total volume of Russia’s debt remains significantly lower and is close to the mark of 146% of GDP. Moreover, the debt of the Russian government is only 18.6% of GDP, compared with 128% in the United States or 120% in Europe. The purposeful preservation of the national debt at a low level remains one of the key directions of the budgetary strategy of the Russian authorities. This was told to RT by the head of the laboratory for the analysis of institutions and financial markets at the Institute for Applied Economic Research, RANEPA, Alexander Abramov. “Here, of course, the impact of the default of 1998 affects. That crisis had a huge impact on our society and laid the foundations for an economical budgetary strategy of the state,” the expert emphasized. According to him, before the pandemic, Russia’s national debt remained even lower due to the budget surplus. Thus, treasury revenues exceeded expenditures, and the authorities sent part of the profits from oil sales to the National Welfare Fund (NWF). Rosfinmonitoring returned multibillion-dollar assets to the budget “During the pandemic, the government decided to support consumer demand through targeted measures and implement separate programs to help vulnerable social groups. Not only we adhered to such a strategy, but also China and some other countries. Due to this, Russia increased its national debt very moderately, “the economist said. Note, according to the draft federal budget for 2021-2023, over the next three years, the ratio of public debt to Russia’s GDP will increase to 21.4%. However, such growth is not at all dangerous, Abramov said. The expert noted that “this is a moderate increase, indicating that the state will return to the budgetary rule and return of budget expenditures to a normal level. At the same time, attracting additional funds through borrowing will partly help solve the problem of citizens’ incomes, stimulate their return to growth.”

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