The global response to the COVID-19 pandemic has skyrocketed the global debt by $24 trillion in a year, pushing it to a record high, according to an Institute of International Finance (IIF) study released Wednesday.
The institute’s global debt monitor found that the global debt has reached $281 trillion with a 35 percentage-point boost to the worldwide debt-to-global domestic product (GDP) ratio, which hit 355 percent.
The increase in debt-to-GDP ratio is higher than rises seen during the Great Recession, with 2008 and 2009 seeing 10 percentage point and 15 percentage-point jumps, respectively, according to Reuters.
The study attributed most of the hike in debt to government support programs, saying it led to half of the $24 trillion rise. Firms, banks and households were found to contribute $5.4 trillion, $3.9 trillion and $2.6 trillion, respectively.
The IIF report predicted that global government debt would rise by an additional $10 trillion in 2021, rising beyond $92 trillion.
Governments in Greece, Spain, Britain and Canada especially contributed to rising debt-to-GDP rates, and Switzerland was the only mature economy to document a decreased ratio.
Among markets classified as emerging, China experienced the biggest surge in debt, with Turkey, Korea and the United Arab Emirates behind it, according to Reuters.
“Political and social pressure could limit governments’ efforts to reduce deficits and debt, jeopardizing their ability to cope with future crises,” the report stated, according to Reuters.
“This could also constrain policy responses to mitigate the adverse impacts of climate change and natural capital loss,” it added.
The coronavirus has wreaked havoc worldwide on countries’ economies and led to more than 109 million confirmed cases and more than 2.4 million fatalities, according to data from Johns Hopkins University.