Report Shows Debt Higher Than Ever
A report on debt around the world has confirmed what we all suspect, that debt is higher now than ever before.
The report from the Institute of International Finance shows that global debt (which includes debt of governments, companies and individuals added together) grew by $9 trillion in 2019 and now sits around the crazy figure of $253 trillion.
This means debt levels are now higher than the really bad year of 2016 and means the world has committed 322% of its GDP to debt. If everyone on the entire planet worked for over 3 years and every single cent on earth was allocated to the debt it would take 3 years of no-one getting any money for any other purpose to use to pay off the debt.
Not Just 3rd World Countries
It may surprise some to learn that the US and European countries carry well over half of all that debt. In fact, their debt-to-GDP ratio sits at 383%. That’s not to say that countries like SA are living debt free. We all know how indebted South Africans are. Another report showed that out of every 10 houses in SA one of them has a person who is lending to others in their community (illegally without registering with the National Credit Regulator). The supply matches the demand as more and more people are living beyond their means borrowing funds to cover their costs.
The question is how long this debt burdened world economy is sustainable for?