World News for Students of English

22-09-2023 07:00

Global debt reached a new high of 307 trillion dollars in the second quarter of 2023, despite rising interest rates restraining bank lending.

The Institute of International Finance (IIF) reported this increase, driven primarily by countries like the United States and Japan. In the first half of 2023, global debt in US dollars surged by 10 trillion and grew by 100 trillion over the last ten years. This surge pushed the global debt-to-GDP ratio to 336%, reversing its previous decline over seven quarters. The rise in inflation was the main reason for the debt ratio’s recent drop.

Over 80% of the new debt accumulation came from developed countries, including the US, Japan, Britain, and France. China, India, and Brazil saw significant increases among emerging markets. Household debt in emerging markets remained above pre-COVID-19 levels, while mature markets experienced the lowest levels in two decades in the first half of 2023. The report highlighted that if inflation persists in mature markets, it could help balance household finances, especially in the US, against potential rate hikes.

Difficult words: surge (to increase rapidly and significantly), accumulation (gathering or amassing something), mature market (a country that has the most advanced economy and capital market).

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