Africa-Press – Kenya. The International Monetary Fund (IMF) reported Wednesday that the decline in private sector credit was offset by an increase in public borrowing, with total debt remaining little changed last year at over 235% of the global gross domestic product (GDP).
In a statement, the IMF said that private debt fell to less than 143% of global GDP, the lowest level since 2015, due to a decrease in household liabilities and minimal change in non-financial business debt.
On the other hand, public debt rose to nearly 93%, according to the IMF database, reflecting an annual survey of the amount and composition of debt held by governments, businesses, and households.
In US dollar terms, total debt rose slightly to $251 trillion, with public debt increasing to $99.2 trillion and private debt falling to $151.8 trillion.
“These global averages mask notable differences across countries and income groups. While the US and China continue to play a dominant role in shaping global debt dynamics, as our April Fiscal Monitor showed, debt and deficit levels in many countries are still high and concerning by historical standards, in both advanced and emerging economies,” the IMF said.
In the US, public debt rose to 121%, up from 119% in the previous report, while China saw an increase to 88% (from 82%).
Excluding the US, public debt in the developed economies fell more than 2.5 points to 110% of GDP. “Increases in some large, advanced economies like France and the UK were offset by declines in Japan and smaller economies, such as Greece and Portugal,” the statement said.
Excluding China, public debt in the developing economies inched down to under 56% on average.
The statement said that governments should help manage these trends by prioritizing gradual fiscal adjustments within the framework of a credible medium-term plan to reduce public debt, adding that creating an environment that encourages economic growth and reduces uncertainty will help alleviate public debt and encourage private sector investment.
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