Global govt debts past $41 tn in 2010
The total amount of debt incurred by governments across the world jumped to a staggering $41.1 trillion last year, accounting for 69% of the global GDP, because of stimulus packages and anaemic economic growth, says a report.business Updated: Aug 15, 2011 22:47 IST
The total amount of debt incurred by governments across the world jumped to a staggering $41.1 trillion last year, accounting for 69% of the global GDP, because of stimulus packages and anaemic economic growth, says a report.
Many governments, especially in the developed world, have resorted to massive stimulus measures to bolster their economies since the 2008 global financial meltdown.
“Public debt outstanding (measured as marketable government debt securities) stood at $41.1 trillion at the end of 2010, an increase of nearly $25 trillion since 2000. This was the equivalent of 69% of global GDP, 23 percentage points higher than in 2000. In just the past two years, public debt has grown by $9.4 trillion — or 13 percentage points of GDP,’’ global consultancy McKinsey said.
Last year alone, government debt accounted for about 80% of the overall growth in total outstanding debt. The government debt worldwide was $31.7 trillion in 2008.
The report said budget deficits have increased due to stimulus packages and loss of revenues due to anaemic growth. “Pension and healthcare costs are increasing as populations age and unfunded pension and healthcare liabilities are not reflected in current government debt figures. Without fiscal consolidation, government debt will continue to increase in the years to come,’’ it noted.
The report was prepared by McKinsey Global Institute, the business and economics research arm of McKinsey.
Meanwhile, overall outstanding debt worldwide has more than doubled in the past 10 years to $158 trillion in 2010.
In 2000, the same stood at $78 trillion. “Debt also grew faster than GDP over this period, with the ratio of global debt to world GDP increasing from 218 per cent in 2000 to 266% in 2010,’’McKinsey said.