Global Debt Adds Up To $22,000 For Everyone Alive

Global debt has tipped $152 trillion – that’s a lot of noughts and almost $22,000 owed by every person alive on the planet today.

That huge amount of debt is a millstone dragging back economic growth, according to experts at the International Monetary Fund.

The dark forces of debt are holding back recovery after the recession and could lead to more stagnation, they say.

The IMF also warns a resurgence of jingoistic nationalism epitomised by Donald Trump in the US and Brexiteers in Britain may lead to barriers that will harm international trade and relations.

The bleak outlook was described in the IMF’s Fiscal Monitor, a regular overhaul of predictions relating the performance of the global economy.

Economic boost for Britain

Britain was singled out as the developed country with the fastest growing economy.

The US was marked down as sluggish.

So who is all this money owed to and how will the debt be repaid?

The IMF says two-thirds of the debt – around $100 trillion is owed by private businesses and individuals, mainly to banks.

The rest – around $52 trillion – is government debt mainly owed to other countries.

The UK national debt, for instance, is largely staked by financial institutions, such as pension funds, investment banks and insurance companies against gilts (government bonds).

Siginificant chunks are owed to other countries, such as the US and China.

Borrowing warning

While the economy generates money, the scale of the debt is not too much of a problem. However, since the credit crunch a lot of private debt held by banks has switched to public debt as the government bailed out financial institutions.

The money is unlikely to ever be repaid as governments tend to run their accounts in the red and top up with more borrowing along the way.

“Global debt is one of the major headwinds against growth in the world economy,” said Vitor Gaspar, Director of the IMF’s Fiscal Affairs Department.

“Reducing debt significantly will require fiscal policies that support economic activity, and facilitate the restructuring of private debt and the clean-up of non-performing bank loans.”

Gaspar also urges governments to put policies into place that will stop companies and individuals from borrowing too much money.

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