According to the International Monetary Fund (IMF), with both nations owing $117.5 trillion, the United States and China are jointly responsible for half of the $235 trillion in total global debt.Read full article
In its report on global debt, titled Global Debt Is Returning to its Rising Trend, released on September 13th, the International Monetary Fund stated that as of 2022, the total amount of global debt had increased by $200 billion to $235 trillion, or 238% of global GDP.
This is 9 percentage points greater than in 2019 according to the international banking organisation.
However, the IMF blamed rich countries, claiming that China and the United States contributed $47.5 trillion and $70 trillion, respectively, to the global debt burden.
Asserting that debt in low-income developing nations has increased “significantly in the last two decades,” it said, “The pace of their increases since the global financial crisis has created challenges and vulnerabilities.”
The IMF emphasised the need of strengthening a country’s ability to collect additional tax revenues for low-income developing nations.
It urged people with unmanageable debt to take a holistic approach that includes both financial restraint and the option of debt restructuring.
The IMF continued, “Most importantly, lowering debt loads will free up funds for new investments and budgetary space, supporting economic development in the years to come. That objective would be aided by labour and product market reforms that increase the potential output at the national level. Pressures on public funding may be further reduced through international tax cooperation, particularly carbon taxes.