FINANCE

Greek debt soared last year, IIF says

greek-debt-soared-last-year-iif-says

Greece recorded the third highest increase in sovereign debt in terms of gross domestic product in the world last year, a year when global debt soared due to the growth of public debt, while the rise of corporate arrears and household dues was reduced thanks to government support measures, according to a survey by the Institute of International Finance (IIF).

The political response to the crisis from the pandemic added $24 trillion to the global debt mountain in 2020, taking it to an all-time high of $281.5 trillion, exceeding 355% of global GDP. That rise is far greater than that during the financial crisis of 2008 and 2009, the IIF noted.

Regarding Greece, the institute estimated that the increase in household debt came to a moderate 2% year-on-year while the rise in corporate arrears (not including the credit sector) came to almost 10%; the bulk of the increase was due to state borrowing, leading to a rise in the ratio of total debt to GDP by almost 50 percentage points. Greece only trailed France and Spain, according to the IIF.

The rising trend of global debt is set to increase in 2021, albeit at a slower pace, the IIF report pointed out.