Global public debt soars to record-high of $92 trillion, UN report reveals

A recently-published United Nations report reveals that global public debt has reached an unprecedented milestone of $92 trillion. Governments around the world resorted to borrowing loans to tackle catastrophic events like the COVID-19 pandemic, which devastated numerous families, overwhelmed the global healthcare system, and severely disrupted the international economy.

Additionally, the report highlights a concerning trend of domestic and external debt growing more than fivefold in the past two decades, outpacing economic growth. In contrast, global GDP has only tripled since 2002. This raises doubtsabout the sustainability of such borrowing practices and their potential long-term impacts on the global economy.

Over 30 percent of global public debt is attributed to developing countries, with China, India, and Brazil accounting for 70 percentof that share. Among the developing nations, fifty-nine of them possess debt-to-GDP ratios exceeding 60 percent,indicating worrisome levels of debt.

UN Secretary-General Antonio Guterres has expressedconcern about the impact on people, despite current market conditions appearing unaffected. Some of the world's poorest nations are faced with a difficult choice between servicing their debts or meeting the needs of their citizens.

Moreover, the UN reportsthat the international financial architecture has made access to credit for developing nations inadequate and costly. The fact that net interest debt payments exceeds 10 percentof revenues in 50 emerging economiesprovides evidence of this.

The UN is recommending that multilateral lenders, such as the IMF, enhance the accessibility of financing for countries facing debt distress. Additionally, the organization advocates for the establishment of a global debt workout mechanism. However, specific details regarding the workings of such a mechanism have not yet been disclosed.