Coronavirus outbreak to leave a legacy of unprecedented global debt

Migrants travelling from Haryana walk towards her native place, during the ongoing Covid-19 nationwide lockdown, at Anand Vihar in New Delhi. Photo: PTI
Enormous doses of stimulus spending are offering relief from coronavirus damage but their lifelong legacy of debt could seed future crises by hobbling economic growth and worsening poverty, especially in developing countries.

 
Central banks and governments worldwide have unleashed at least $15 trillion of stimulus via bond-buying and budget spending to cushion the blow of a global recession tipped to be the worst since the 1930s.

But the steps will pile even more debt on countries already struggling with the aftermath of the 2008-9 financial crisis — total global debt has risen $87 trillion since 2007, and governments, with $70 trillion, accounted for the lion’s share of that increase, the Institute of International Finance estimates (IIF).



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