The world has never been more indebted than at this historic moment. Even the total value of the global debt amounts to 250 trillion dollars, a figure that is three times higher than that recorded twenty years ago, according to a Citigroup study based on data from the Institute of International Finance. Who are the biggest debtors? United States, China, the Eurozone and Japan which alone hold two-thirds of total household debt, three-quarters of corporate debt and about 80% of global public debt.
Looking at the detailed debt map, within the eurozone Italy is one of the countries with the highest level of debt at 131,8%, against Germany which boasts a debt/GDP ratio of 59,7%, Spain at 98,3% and Portugal at 125,7%. In this scenario, however, it is France that has recorded the highest percentage increase in the debt/GDP ratio since 2007 and which stands at 97%. Greece remains noted special with a debt of 178,6%.
Outside the Eurozone, the highest level of debt is recorded United States where the debt/GDP ratio is 105,4%, China at 50,1% and Japan which leaves the other countries behind and its debt stands at 253 percentage points. Japan's debt, however, is all domestic and basically turns into a lot of money.
Al Wall Street Journal Emre Tiftik, deputy director of the Institute of International Finance, explains that we have entered a new era – now that the main central banks have decided to change monetary policies that are moving towards raising interest rates, such as Federal Reserve itself explained. “Current debt levels are early warning signs of overheating in specific sectors and countries,” comments Tiftik.
Since the crisis of 2007-2008 the debt rush it has made it possible to finance investments and growth, to the point of generating an unsustainable level of debt and triggering a negative spiral that has led to today's levels. Economists and investors fear the inefficient use of accumulated debt and hence the concerns of those who claimed that a maneuver financed by public debt would have created a vicious circle which weighs on growth rather than triggering it. A second element of concern is the use of debt instruments untested and the result of creative finance and to which Chinese companies have made great use and, finally, the debt deterioration.
According to information from Interactive Data Corporation, it is equal to 40% the percentage of US bonds rated “BBB”, ie those bonds of low quality and bordering on being considered as risky investments.
The data on China is incorrect, it is the country with the largest debt among the industrialized ones!
His statement is correct in reference to China's total debt. The figure of 50,1%, on the other hand, is the ratio between public debt and GDP.