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RBI says global debt is 40% more than what it was during 2008-09

The Reserve Bank of India’s (i.e. RBI ) financial stability report has been raised that concerns the risks of the rising debt levels across the world, particularly for the emerging markets as well.

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According to the regulator’s report of the sources, the global debt is now more than that seen during the 2008 global financial crisis (i.e. GFC). The report clearly states that global debt has been simply increased across all sectors and so also stood at around $255 trillion in the December quarter of 2019 as told by RBI.

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At over around 322% of the gross domestic product (i.e. GDP), global debt is currently almost around 40% or around $87 trillion with more than that seen that during the onset of the global financial crisis in 2008 as well. Citing the International Institute of Finance (i.e. IIF), the report told that if the net govt borrowing the doubles from 2019 levels and so also there is at around 3% of the contraction in the global economic activity, as it would lead to the world’s debt pile that surging from around 322% of the GDP to over around 342% of the GDP in 2020. Emerging markets (i.e. EM) that have seen a surge in their financial liabilities since the GFC that one of the badly affected by the rising global debt levels would be.

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As RBI ’s financial stability report told that “The debt of the around 30 major EMs surged from at around the $22 trillion in Q4 of 2007 to around $71 trillion in the Q4 of 2019 as well.”

Likewise Barring China, the foreign currency debt makes up around 20% of the EM’s debt outside of the financial sector as well. The RBI report has also been mentioned that around $20 trillion worth of the bonds and so also the loans will fall due for the repayment by the end of 2020 from this, as EMs will have to repay around like $4.3 trillion.

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