Credit: Pedestrians in the snow in Tokyo, Japan: the country is one of the top three borrowers in the world (photo: Morio Taga/Newscom)

New Data on Global Debt

Samba Mbaye, Marialuz Moreno Badia

January 2, 2019
January 2, 2019
[caption id="attachment_25364" align="alignnone" width="1024"] Pedestrians in the snow in Tokyo, Japan: the country is one of the top three borrowers in the world (photo: Morio Taga/Newscom)[/caption]

Until recently, we had a partial view of global debt. Our new update to the IMF’s Global Debt Database, first made public in May 2018, now fills even more of the gaps. We have compiled data on public and private debt for 190 countries, dating back to 1950, which now includes the latest numbers for 2017.

We make these data free and publicly available for all to use because we believe transparency can help create better public policy. 

The long view

In the past, we had detailed information about some bigger economies, such as the United States and Japan, but existing databases either covered a narrow measure of debt—for example, bank credit—for a broad sample of countries, or a comprehensive one for a few countries and years. By including both the government and private sides of borrowing for the entire world, the Global Debt Database offers an unprecedented picture of global debt in the post-World War II era. From all these data we have gathered a few new insights on debt:

Was 2017 different?

For 2017, the signals are mixed. Compared to the previous peak in 2009, the world is now more than 11 percentage points of GDP deeper in debt. Nonetheless, in 2017 the global debt ratio fell by close to 1½ percent of GDP compared to a year earlier. The last time the world witnessed a similar decline was in 2010, although it proved short-lived. However, it is not yet clear whether this is a hiatus in an otherwise uninterrupted ascending trend or if countries have begun a longer process to shed more debt. New country data available later in 2019 will tell us more about the global debt picture. For 2017, we divided up countries into three groups based on their debt profile and here’s what we found: 

Overall, the picture of global debt has changed as the world has changed. The data shows that a big part of the decline in the global debt ratio is the result of the waning importance of heavily-indebted advanced economies in the world economy.

With financial conditions tightening in many countries, which includes rising interest rates, prospects for bringing debt down remain uncertain. The high levels of corporate and government debt built up over years of easy global financial conditions, which the Fiscal Monitor documents, constitute a potential fault line.

So, as we close the first decade after the global financial crisis, the legacy of excessive debt still looms large.

In April 2019 we will release our next Fiscal Monitor with the latest facts about public finances, including debt, which will help shed some new light and offer policy advice for countries. 

 
Related Links:
Chart of the Week: Government Debt Is Not the Whole Story: Look at the Assets
Bringing Down High Debt
Managing Debt Vulnerabilities in Low-Income and Developing Countries
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