According to the International Monetary Fund’s Fiscal Monitor report, global debt in 2020 “jumped by 14% to a record-high $226 trillion,” encompassing public and private borrowing.

According to Vitor Gaspar, director of the IMF’s Fiscal Affairs Department, public debt stands at $88 trillion, or close to 100% of GDP, and is only likely to drop gradually.

However, because there is a risk that excess private debt would become public debt, “countries will need to adjust fiscal policies to their particular circumstances,” according to a blog post about the paper by Gaspar.

Massive public support helped to mitigate the financial and health effects of the pandemic.

If fully implemented, massive aid programs in the United States and Europe “may add a combined $4.6 trillion to global GDP between 2021 and 2026,” according to Gaspar.

With progress in managing the virus, investment in industrialized economies is shifting away from the immediate crisis and toward ecological and digital initiatives, as well as efforts to “make economies more inclusive.”

For example, US budget proposals “aim to reduce inequality and could cut poverty by nearly one-third,” he noted.

But emerging markets and low-income developing countries “face a more challenging outlook” and “long-lasting negative impacts,” as falling tax revenues due to the ongoing crisis will leave little room for investing in development, he said.

He reiterated the IMF’s request for continuing assistance to the world’s poorest countries with large debt loads.

“While acknowledging that the international community has offered significant support to ease budgetary vulnerabilities in low-income countries,” he stated, “far more is required.”