Standard & Poor's, the credit rating agency, forecast that the value of the world's government debt will reach record levels, rising by 260 percent, exceeding the $200 trillion barrier by the end of this year, despite the possibility of servicing these debts without difficulty due to low interest rates.
According to the agency, the accumulation of indebtedness was necessary in light of the response of the economic policy to deal with the Corona pandemic. Indicating that the rise in indebtedness with weak indicators of creditworthiness amid the recovery of the global economy may result in more defaults.
According to the agency, the recovery in global GDP growth will not be complete until vaccinations are widespread enough for people to feel comfortable with their mobility.
S&P agency had revealed that the global debt recorded an increase of 14 points as a percentage of global GDP, after it witnessed inflation due to the economic downturn caused by Covid-19, and the excessive borrowing that governments, companies and families were forced to resort to.
Note that, the global debt had risen at the end of last year, due to the restrictions of the closure caused by the epidemic crisis, to about 281 trillion dollars, recording an increase of 24 trillion dollars.
Source (London-based Al-Arab Newspaper, Edited)
