(GLO)-Under the impact of a series of overlapping challenges, government debt as a percentage of GDP has increased in more than 100 developing countries. To achieve sustainable development goals, the United Nations calls on the world to find strong multilateral solutions to address the public debt crisis facing developing countries.
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World public debt increased by nearly 305 billion USD in the first quarter. Illustration photo: Shuterstock |
The South China Morning Post on May 18 quoted a report from the Institute of International Finance (IIF - USA) showing that global debt in the first quarter of this year increased to nearly 305,000 billion USD, in which emerging markets shouldered record debt.
Global debt rose by $8.3 trillion in the first quarter compared to the end of 2022, to $304.9 trillion. Global debt is now $45 trillion higher than it was before the Covid-19 pandemic and is expected to continue rising. The debt-to-GDP ratio hit a record 360% in 2021 and then stabilized at 335%, higher than before the pandemic.
IIF experts said that aging populations and rising healthcare costs continued to put pressure on spending across countries, while "heightened geopolitical tensions also led to further increases in medium-term defence spending".
Notably, the report found that 75% of emerging markets saw their dollar debt increase in the first quarter, with the overall figure surpassing $100 trillion for the first time. Debt rose to $100.7 trillion, or 250% of GDP, from $75 trillion in 2019. The data showed that China, Mexico, Brazil, India and Türkiye saw the biggest increases.
UN Secretary-General Antonio Guterres said that due to the impact of the Covid-19 pandemic, soaring food and fuel prices, inflation and financial crises, foreign debt of poor countries has increased sharply in the past 10 years. In the past two years, some countries have had to declare bankruptcy, of which African countries such as Nigeria, Mali and Burkina Faso have lost up to 20 years of development. The debt default has pushed countries into a spiral of political violence and social instability, due to the lack of essential services, security conditions, health care and basic education.
The United Nations Development Programme (UNDP) has urged countries to address the growing gap between rich and poor countries, change the multilateral landscape and create a debt structure that is appropriate to the current world context. UNDP warned that without urgent measures, many countries will face debt and default, unable to invest in projects to fight poverty, transform energy, mitigate climate change and thus make it difficult to achieve the world's sustainable development goals.
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