Credit: (photo: Jakub Krechoqicz/Alamy)

New Data on World Debt: A Dive into Country Numbers

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The new update of the IMF’s Global Debt Database shows that total global debt (public plus private) reached US$188 trillion at the end of 2018, up by US$3 trillion when compared to 2017. The global average debt-to-GDP ratio (weighted by each country’s GDP) edged up to 226 percent in 2018, 1½ percentage points above the previous year. Although this was the smallest annual increase in the global debt ratio since 2004, a closer look at the country-by-country data reveals rising vulnerabilities, suggesting that many countries may be ill-prepared for the next downturn.

Global debt reached $188 trillion in 2018.

In advanced economies the average debt ratio declined, but there is no clear sign of a significant push to reduce debt. In emerging market economies and low-income developing countries, the average debt ratios rose further. Notably, China’s total debt ratio reached 258 percent of GDP at end-2018—the same as the United States and nearing the average for advanced economies, which was 265 percent.

No big changes in 2018

The reduction in the global debt ratio in 2017 that we wrote about in our last blog did not mark the beginning of a declining trend. In 2018, the global debt ratio rose only slightly above the level in 2016.

Looking at overall trends, there are two distinct groups:

Increasing vulnerabilities under the surface

A detailed look at the numbers reveals the following dynamics.



Unlike before the global financial crisis, risks are not solely concentrated in the private sector but also in the public sector, partly reflecting the unresolved legacy of the global financial crisis. As discussed in the October 2016 Fiscal Monitor, excessive private debt levels increase the vulnerability to shocks and could lead to an abrupt and costly debt reduction process. But reducing debt in the private sector may also, in turn, be a burden for an already overindebted public sector if a decline in output leads to lower revenue or corporate defaults trigger losses and curb lending by banks. It is therefore important to reduce such vulnerabilities before the next adverse shock.

We are grateful to Juliana Gamboa Arbelaez, Virat Singh, and Yuan Xiang for outstanding research assistance.

Note: In the text and graphs, the average debt ratio for a group of countries is calculated by weighting each country’s debt-to-GDP ratio by the share of that country’s GDP in the group’s aggregate GDP. To compute a group’s aggregate GDP, each country’s GDP is in U.S. dollars at the period-average exchange rate.

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