Business News: Will Rise in Global Debt Lead to Economic Crisis?

21 Oct, 2023 Author: Ayushee Joshi

Business News: The term Global Debt describes borrowings made by governments, commercial companies, and people. Governments use borrowing to pay for a variety of expenses that they are unable to cover with tax and other income sources. Governments may also take out loans to cover the interest on loans made in the past to cover expenses. The amount of global debt is said to have increased by around $100 trillion in the past ten years.

Reasons Behind Rise in Global Debts

According to a study by the Institute of International Finance (IIF), by the end of June 2023, global debt reached an all-time high of $307 trillion. Furthermore, after falling rather sharply for seven consecutive quarters, the world debt as a percentage of gross domestic product (GDP) has started to rise once more, reaching 336%. According to the Institute of International Finance, developed economies accounted for more than 80% of the $10 trillion increase in global debt during the first half bringing it to a record $307 trillion.