Global public debt for 2020 exceeded prior expectations as the coronavirus pandemic pushed governments to roll out unprecedented fiscal support to revive the world's economy, the International Monetary Fund said in its latest fiscal monitor update.
Average global public debt likely reached 97.6% of GDP at the end of 2020, higher than the IMF's projection of an 84% average announced in October 2019. Public debt is forecast at 99.5% of GDP this year.
Global fiscal support hit $14 trillion in 2020, including $7.8 trillion in additional spending or forgone revenue and $6 trillion in equity injections, loans and guarantees, the IMF said.
Advanced economies had the highest increases in deficits and debt as they announced $11.8 trillion in fiscal support to weather the impact of the pandemic, reflecting roughly equal increases in spending and declines in revenues.
Meanwhile, the rise in deficits in emerging market and middle-income economies and low-income developing countries was largely the result of weaker revenues due to lower economic activity.
The IMF said that the limited fiscal response from low-income economies due to financing constraints and less-developed welfare programs could have a lasting impact in these countries.
Advanced economies' fiscal deficit likely reached 13.3% of GDP in 2020, while that of emerging market and middle-income economies is estimated at 10.3%. A deficit of 5.7% of GDP is expected for low-income developing countries.
For 2021, fiscal deficit is seen at 8.8% of GDP for advanced economies, 8.6% for emerging market and middle-income economies and 5.0% for low-income developing countries.