IMF says U.S., China owe half of world’s debts

The United States (U.S.A) and China account for half of the world’s total indebtedness of $235 trillion, with both countries owing $117.5 trillion.

This was announced yesterday by the International Monetary Fund (IMF).

In its global debt update, titled: Global Debt Is Returning to its Rising Trend, the global monetary fund said in a space of one year from 2021, global debt position rose by $200 billion to $235 trillion, equivalent to 238 per cent of the world’s Gross Domestic Products (GDP), as of 2022.

According to the institution, this is nine percentage points higher than in 2019.

However, the IMF laid the weight of the rising cause of global debt on developed nations, fingering China and the U.S.A contributing $47.5 trillion and $70 trillion to the debt basket.

It said debt in low-income developing countries has risen “significantly in the last two decades,” adding: “The pace of their increases since the global financial crisis has created challenges and vulnerabilities.”

In the global debt update anchored by three senior officials of the IMF – Vitor Gaspar, the Director of the Fiscal Affairs Department; Marcos Poplawski-Ribeiro, Deputy Director; and Jiae Yoo, an economist – the IMF warned policymakers to be steadfast and “unwavering over the next few years in their commitment to preserving debt sustainability”.

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