As of 2022[update], global debt was the equivalent of 305 trillion USD. This including debt by both public and private debtors.[2] The total external debt owed by public and private debtors to creditors in other countries amounted to $76 trillion in 2019.[3] The global debt continues to grow. Between 2015 and 2019 global debt increased by approximately 6% per year.[4][5]
Private debt% of GDP: This is the total domestic and external debt of the citizens and private companies as percent of the gross domestic product of the country.
External debt: This is the total debt of public and private debtors to foreign country banks and other foreign creditors. The amounts are in billion US $, calculated by the official exchange rate (a billion is defined here as a thousand millions, or 109).
Total debt, billion $: This is the sum of all debt, domestic and external, owed by public and private debtors in the country. The amounts are in billion US $, calculated by the official exchange rate.
Money supply, billion $: This is the supply of broad money, or money in circulation, of the country in its own currency. The amounts are in billion US $, calculated by the official exchange rate.
Disclaimer: Most values are from 2020 or 2021. Some values are a few years older. Values from different sources may not have been calculated in the same way. You cannot expect the table to be updated every year because some information is difficult to find and nobody has volunteered to keep the table up to date.
Data sources:
Public debt: IMF global debt database. Data for 2020.[6]
Private debt: IMF global debt database. Data for 2020.[6]
External debt: Data for Australia, Austria, Bahrain, Belgium, Canada, Chile, Croatia, Cuba, Cyprus, Czech Rep., Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel, Italy, Japan, North and South Korea, Kuwait, Latvia, Lithuania, Luxemburg, Malta, Namibia, Netherlands, New Zealand, Norway, Oman, Poland, Portugal, Puerto Rico, Qatar, Saudi Arabia, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Taiwan, United Arab Emirates, United Kingdom, USA, Uruguay, European Union, and World are from the CIA world factbook with data from 2019.[3] All other data are from the World bank with data for 2020.[7]
GDP: Most data are from IMF World Economic Outlook Database, 2022.[8] Data for Afghanistan, Cuba, Lebanon, Pakistan, Syria, Ukraine, and World are from the World bank with data for 2020 or 2021.[7] The data for North Korea are copied from Economy of North Korea.
The money supply data are from the World bank with data for 2020.[7]
There is more debt in the world than there is money in circulation.[9] The ratio of total debt to money supply ranges from 1.7 in Japan and Switzerland to 4.7 in Denmark and Iceland. The ratio for the world total is 1.8, according to the above table. A high ratio of public debt to money cannot be sustained, according to some models.[10] Economists prefer to look at the ratio of debt to the GDP. This ratio ranges from 1.5 in Latvia to 5.0 in Luxemburg. The world total is 3.5, according to the Institute of International Finance.[5]
The reason why there is more debt than money in circulation can be explained by the creation of credit money. When a bank issues a loan, it creates credit money and debt at the same time. The total debt in society and the total money in circulation are both increased by the same amount, which is the principal of the loan. By the time the loan has to be paid back, the debt has been increased by the compound interest while the credit money has not been increased. Most of the excess debt thus originates from compound interest of bank credit.[11][12]
It may seem impossible to repay all debt when there is more debt than money in the world, but it is theoretically possible to pay back all debt if the banks spend their income from interest payments to buy products and services so that the same money can circulate and be reused for more interest payments. However, critics fear that too much money is hoarded in the financial economy rather than spent in the real economy so that the total debt is spiraling up rather than being paid down.[13][14] In fact, the global debt has grown by approximately 6% per year during the period from 2015 to 2021.[4][5]
The fast growing debt is a consequence of the current financial system that leads to an unbalanced and uncontrolled growth of money and debt.[12][20] There is a distorted balance between public and private interests with insufficient democratic accountability, according to a Dutch government report.[19] A high level of debt makes the economy unstable with risks of economic crises.[11][12] The consequences of recurrent crises has been described as unfair because a disproportionate share of the benefits during a financial boom goes to the financial sector, while the general public bears the costs during the subsequent bust in the form of bankruptcies, bank bailouts, unemployment, and home evictions.[19] For example, farmers in India are being forced to sell their farm and land because of inescapable debt (see Farmers' suicides in India).[21]
Consequences of high external debt
External debt consists of government debt to foreign countries as well as private debt in foreign currencies. External debt is different from domestic debt because it affects the trade balance. Interest payments and inflation contribute negatively to the trade balance of the debtor country, while it provides a surplus to the creditor country or the country that issues the currency.[12] While the government can control the internal debt through its monetary policy and fiscal policy, it has fewer means to control the external debt.[12] A high external debt can lead to sovereign default, especially for poor countries with limited export.[11]
The growing level of unserviceable external debt in poor countries is producing a dependent relationship between debtor and creditor countries. Critics claim that this debt dependence is often used as leverage for a neocolonial relationship.[22][23] This view is opposed by development economists who find a beneficial effect of the inflow of foreign capital, whether in the form of direct investment or loans.[24]
Private banks earn rents from the circulation of money because most of the money in circulation originates from bank credit.[25] An imbalance results if money created in one country is used for circulation in another country. Currency substitution, i.e. payment in foreign currencies, is common in countries with a weak currency.[26] As far as the currency that circulates internationally originates from bank credit, it provides a seigniorage profit and an interest rent in the country where the money is created and a corresponding trade deficit for the country where the currency is circulating or stored.[27][28] This exacerbates the situation in poor countries, making them vulnerable to increasing external debt, inflation, and economic crises.[29]
Similar problems appear in countries that do not have their own currency. For example, the high external debt and financial crises of Greece, Italy, Spain, and several other Eurozone countries in the aftermath of the 2008 financial crisis was partially due to their lack of monetary autonomy and inability to control the money supply.[11]
The economy of Ecuador is the eighth largest in Latin America and the 69th largest in the world by total GDP. Ecuador's economy is based on the export of oil, bananas, shrimp, gold, other primary agricultural products and money transfers from Ecuadorian emigrants employed abroad. In 2017, remittances constituted 2.7% of Ecuador's GDP. The total trade amounted to 42% of the Ecuador's GDP in 2017.
The economy of the Republic of the Congo is a mixture of subsistence hunting and agriculture, an industrial sector based largely on petroleum extraction and support services. Government spending is characterized by budget problems and overstaffing. Petroleum has supplanted forestry as the mainstay of the economy, providing a major share of government revenues and exports. Nowadays the Republic of the Congo is increasingly converting natural gas to electricity rather than burning it, greatly improving energy prospects.
The mixed economy of Sri Lanka was worth $84 billion by nominal gross domestic product (GDP) in 2019 and $296.959 billion by purchasing power parity (PPP). The country had experienced an annual growth of 6.4 percent from 2003 to 2012, well above its regional peers. This growth was driven by the growth of non-tradable sectors, which the World Bank warned to be both unsustainable and unequitable. Growth has slowed since then. In 2019 with an income per capita of 13,620 PPP Dollars or 3,852 (2019) nominal US dollars, Sri Lanka was re-classified as a lower middle income nation with the population around 22 million (2021) by the World Bank from a previous upper middle income status.
The 1997 Asian financial crisis was a period of financial crisis that gripped much of East and Southeast Asia during the late 1990s. The crisis began in Thailand in July 1997 before spreading to several other countries with a ripple effect, raising fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998–1999 was rapid, and worries of a meltdown quickly subsided.
Within the budgetary process, deficit spending is the amount by which spending exceeds revenue over a particular period of time, also called simply deficit, or budget deficit, the opposite of budget surplus. The term may be applied to the budget of a government, private company, or individual. A central point of controversy in economics, government deficit spending was first identified as a necessary economic tool by John Maynard Keynes in the wake of the Great Depression.
Monetary reform is any movement or theory that proposes a system of supplying money and financing the economy that is different from the current system.
A country's gross external debt is the liabilities that are owed to nonresidents by residents. The debtors can be governments, corporations or citizens. External debt may be denominated in domestic or foreign currency. It includes amounts owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and the World Bank.
The debt of developing countries usually refers to the external debt incurred by governments of developing countries.
A country's gross government debt is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit occurs when a government's expenditures exceed revenues. Government debt may be owed to domestic residents, as well as to foreign residents. If owed to foreign residents, that quantity is included in the country's external debt.
The 1998–2002 Argentine great depression was an economic depression in Argentina, which began in the third quarter of 1998 and lasted until the second quarter of 2002. It followed fifteen years of stagnation and a brief period of free-market reforms. The depression, which began after the Russian and Brazilian financial crises, caused widespread unemployment, riots, the fall of the government, a default on the country's foreign debt, the rise of alternative currencies and the end of the peso's fixed exchange rate to the US dollar. The economy shrank by 28 per cent from 1998 to 2002. In terms of income, over 50 per cent of Argentines lived below the official poverty line and 25 per cent were indigent ; seven out of ten Argentine children were poor at the depth of the crisis in 2002.
Foreign exchange reserves are cash and other reserve assets such as gold and silver held by a central bank or other monetary authority that are primarily available to balance payments of the country, influence the foreign exchange rate of its currency, and to maintain confidence in financial markets. Reserves are held in one or more reserve currencies, nowadays mostly the United States dollar and to a lesser extent the euro.
The Convertibility plan was a plan by the Argentine Currency Board that pegged the Argentine peso to the U.S. dollar between 1991 and 2002 in an attempt to eliminate hyperinflation and stimulate economic growth. While it initially met with considerable success, the board's actions ultimately failed. The peso was only pegged to the dollar until 2002.
The Latin American debt crisis was a financial crisis that originated in the early 1980s, often known as La Década Perdida, when Latin American countries reached a point where their foreign debt exceeded their earning power, and they could not repay it.
The net international investment position (NIIP) is the difference between the external financial assets and liabilities of a country. External debt of a country includes government debt and private debt. External assets publicly and privately held by a country's legal residents are also taken into account when calculating NIIP. Commodities and currencies tend to follow a cyclical pattern of significant valuation changes, which is also reflected in NIIP.
A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full when due. Cessation of due payments may either be accompanied by that government's formal declaration that it will not pay its debts (repudiation), or it may be unannounced. A credit rating agency will take into account in its gradings capital, interest, extraneous and procedural defaults, and failures to abide by the terms of bonds or other debt instruments.
Inflationism is a heterodox economic, fiscal, or monetary policy, that predicts that a substantial level of inflation is harmless, desirable or even advantageous. Similarly, inflationist economists advocate for an inflationist policy.
Original sin is a term in economics literature, proposed by Barry Eichengreen, Ricardo Hausmann, and Ugo Panizza in a series of papers to refer to a situation in which "most countries are not able to borrow abroad in their domestic currency."
Domestic liability dollarization (DLD) refers to the denomination of banking system deposits and lending in a currency other than that of the country in which they are held. DLD does not refer exclusively to denomination in US dollars, as DLD encompasses accounts denominated in internationally traded "hard" currencies such as the British pound sterling, the Swiss franc, the Japanese yen, and the Euro.
Mexico and the International Monetary Fund are the international relations between Mexico and the International Monetary Fund (IMF). Mexico joined the IMF in 1945. As of 2022, Mexico has had 18 numbers of arraignment with the IMF.
The external debt of India is the debt the country owes to foreign creditors. The debtors can be the Union government, state governments, corporations or citizens of India. The debt includes money owed to private commercial banks, foreign governments, or international financial institutions such as the International Monetary Fund (IMF) and World Bank.
↑ Rodriguez, Alvaro (1993). "The Debt Money Ratio: What are the Limits?". In Baldassari, Mario; Mundell, Robert; McCallum, John (eds.). Debt, Deficit and Economic Performance. St. Martin's Press. pp.131–150.
1 2 3 4 Angeles, Luis (2022). Money Matters: How Money and Banks Evolved, and Why We Have Financial Crises. Palgrave Macmillan. ISBN978-3-030-95515-1.
↑ Turner, Adair (2016). Between debt and the devil: money, credit, and fixing global finance. Princeton University Press.
↑ Shiva, Vandana (2013). Making Peace with the Earth. Pluto Press. ISBN9780745333762.
↑ Charlton, Roger (2016). "External Debt, Economic Success and Economic Failure: State Autonomy, Africa and the NICs". In Riley, Stephen P. (ed.). The Politics of Global Debt. Springer. pp.168–188. ISBN978-1-349-22822-5.
↑ Bossone, Biagio (2021). "Commercial bank seigniorage and the macroeconomy". International Review of Financial Analysis. 76: 101775. doi:10.1016/j.irfa.2021.101775. S2CID235507092.
↑ Canzoneri, Matthew; Cumby, Robert; Diba, Behzad; López-Salido, David (2013). "Key currency status: An exorbitant privilege and an extraordinary risk". Journal of International Money and Finance. 37: 371–393. doi:10.1016/j.jimonfin.2013.06.006.
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