About $4.8 trillion were added to the global debt pile in the second quarter of this year, pushing the total to a record high of $296tn as sovereigns, corporates and households continued to borrow amid continued pandemic-driven headwinds.
The overall debt, which declined slightly during the first quarter of this year, rose by more than $36tn in the quarter ending June 30 from its pre-pandemic level, the Institute of International Finance said in its Global Debt Monitor.
However, the global debt-to-gross domestic product ratio registered the first quarter-on-quarter decline since the onset of the pandemic. At around 353 per cent, in the second quarter of 2021, the global debt-to-GDP ratio was 9 percentage points below the all-time high of 362 per cent recorded in the first three months of this year.
Overall, 51 of the 61 countries monitored by the IIF recorded a decline in debt-to-GDP ratios in the second quarter, mostly on the back of a pick-up in economic activity.
“However, the recovery has not been strong enough to bring debt ratios below pre-pandemic levels in most cases,” it said.
Governments and central banks globally have poured about $25tn in monetary and fiscal stimulus support since the onset of the pandemic to boost economies, strengthen banks and stabilise financial markets. But governments are still looking at widening fiscal deficits amid an uneven global economic recovery and continue to borrow.
The global economy, which last year tipped into its deepest recession since the Great Depression of the 1930s, is expected to grow 6 per cent in 2021. However, the rapid spread of the more virulent Delta strain of Covid-19 and inequitable access to vaccines is threatening the pace of economic rebound.
The rise in global debt was “sharpest in emerging markets”, with total debt topping $92tn in the second quarter, up from over $87tn in the same period in 2020. The steady rise in emerging markets debt has pushed it $15tn higher than the pre-pandemic levels.
China’s debt levels also rose with total sectoral debt rising by an estimated $2.3tn in the second quarter to reach an all-time high of over $55tn. “The pace of China’s debt build-up has been much steeper than in other countries,” the IIF said, adding that the non-financial sector accounted for over 40 per cent of the rise.
Although the rate of growth in total debt remained slower than in the second half of 2020, government bond issuance rebounded to hit a new record of "some $780 billion" in the second quarter, according to the report.
Emerging markets debt, excluding China, also reached a fresh high of nearly $36tn, about $3tn higher since the onset of the pandemic, mainly driven by government borrowing including Brazil, Korea and Russia.
Mature market debt levels also rose, albeit slowly, after a slight decline in the first three months of the year. Total debt in mature markets increased by over $1.3tn to near $205tn, or about 418 per cent of their combined GDP.
“The debt build-up was most substantial in the Euro area, largely driven by Germany and France,” the IIF said.
“At around $490bn, debt accumulation in the US in Q2 was the slowest since the onset of the pandemic. However, household debt increased at a record pace [while] corporate debt declined.”
Global household indebtedness jumped by $1.5tn in the first six months of 2021 and now stands at some $55tn. During the same period, government and corporate debt grew at a slightly slower pace, at around $1.3tn and $1.2tn, respectively.
“Nearly one-third of the countries in our sample saw an increase in household debt-to-GDP ratios in H1 2021, particularly in Switzerland, Russia and Korea,” the IIF said.
UAE currency: the story behind the money in your pockets
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
The%20specs
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Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
Company%20profile
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Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
• Prioritise a shift towards working with AI and autonomous systems
• Invest in the resilience of military space systems.
• Number of active reserves should be increased by 20%
• More F-35 fighter jets required in the next decade
• New “hybrid Navy” with AUKUS submarines and autonomous vessels
UAE rugby in numbers
5 - Year sponsorship deal between Hesco and Jebel Ali Dragons
700 - Dubai Hurricanes had more than 700 playing members last season between their mini and youth, men's and women's teams
Dh600,000 - Dubai Exiles' budget for pitch and court hire next season, for their rugby, netball and cricket teams
Dh1.8m - Dubai Hurricanes' overall budget for next season
Dh2.8m - Dubai Exiles’ overall budget for next season
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UAE currency: the story behind the money in your pockets
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
if you go
The flights
Emirates have direct flights from Dubai to Glasgow from Dh3,115. Alternatively, if you want to see a bit of Edinburgh first, then you can fly there direct with Etihad from Abu Dhabi.
The hotel
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Located in the heart of Mackintosh's Glasgow, the Dakota Deluxe is perhaps the most refined hotel anywhere in the city. Doubles from Dh850
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Events and tours
There are various Mackintosh specific events throughout 2018 – for more details and to see a map of his surviving designs see glasgowmackintosh.com
For walking tours focussing on the Glasgow Style, see the website of the Glasgow School of Art.
More information
For ideas on planning a trip to Scotland, visit www.visitscotland.com
PREMIER LEAGUE RESULTS
Bournemouth 1 Manchester City 2
Watford 0 Brighton and Hove Albion 0
Newcastle United 3 West Ham United 0
Huddersfield Town 0 Southampton 0
Crystal Palace 0 Swansea City 2
Manchester United 2 Leicester City 0
West Bromwich Albion 1 Stoke City 1
Chelsea 2 Everton 0
Tottenham Hotspur 1 Burnley 1
Liverpool 4 Arsenal 0
