The total debt of developing countries, taking into account the debt of governments, the population and companies in the third quarter of 2021, reached a new record, rising to 92.6 trillion dollars. 80 percent of total growth had to China, writes Reuters with reference to the International Finance Institute report.
The ratio of debt to GDP in the Asian country from July to September increased by 25 percent since the end of 2019 and is now equal to 330 percent. The State Dolg of China remained at a record level of 63 percent of GDP. The total debt of the developing market countries without taking into account the indicators of China rose to a new maximum of 36.4 trillion dollars, mainly due to the increase in public debt.
Over 95 percent of the growth of developing countries since the end of 2019, accounts for bonds in local currency. However, the attractiveness of such papers for foreign investors has decreased – now non-residents own bonds in local currency in the amount of 19 percent of debt (compared with 23 percent at the end of 2019). In Indonesia and Russia, the share of foreign capital declined the strongest, while the demand for the bonds of China, Peru and Korea increased.
Despite the growth of debt of developing countries, global debt decreased to 296 trillion after a record in the second quarter. In states with a developed market, debt reduced by 1.4 trillion dollars compared to the past quarter ended in June. The most sharp decline is recorded in Japan and in the Eurozone. However, the current global debt is still 36 trillion dollars more than before the pandemic.
In November, the largest economy of the world, the United States, again found itself on the verge of default due to the ceiling of the public debt. The head of the Ministry of Finance, Janet Yellen, called on the Congress to increase or freeze the limit of state debt by December 15, otherwise the risk of suspension of the government due to lack of funds and the impossibility of paying obligations.