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@$$4$Since COVID-19 started its spread around the world in 2020…global governments have had to increase their expenditures to deal with higher healthcare costs, unemployment, food insecurity, and to help businesses to survive. Countries have taken on new debt to provide financial support for these measures, which has resulted in the highest global debt levels in half a century…[Below is a] debt-to-GDP data by country from the most recent World Economic Outlook report by the IMF.
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The debt-to-GDP ratio is a simple metric that compares a country’s public debt to its economic output. By comparing how much a country owes and how much it produces in a year, economists can measure a country’s theoretical ability to pay off its debt.
…The World Bank published a study showing that countries that maintained a debt-to-GDP ratio of over 77% for prolonged periods of time experienced economic slowdowns.
COVID-19 has worsened a debt crisis that has been brewing since the 2008 global recession which is hitting poor and middle-income countries harder than rich countries. Wealthier countries are borrowing to launch fiscal stimulus packages while low and middle income countries cannot afford such measures, potentially resulting in wider global inequality.
A report from the International Monetary Fund (IMF) shows that at least 100 countries will have to reduce expenditures on health, education, and social protection. Also, 30 countries in the developing world have high levels of debt distress, meaning they’re experiencing great difficulties in servicing their debt [and,] as interest rates rise, IMF officials warn that higher interest rates will diminish the impact of fiscal spending, and cause debt sustainability concerns to intensify.
The above version of the original article by Raul Amoros (visualcapitalist.com) was edited [ ] and abridged (…) to provide you with a faster and easier read. Also note that this complete paragraph must be included in any re-posting to avoid copyright infringement.
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