Global indebtedness has reached unprecedented levels. Prior to the onset of the Covid-19 pandemic, both developing and advanced countries had already amassed large amounts of sovereign and private debt. During the Covid-19 pandemic, countries put together monetary and fiscal measures to save lives and livelihoods, including “large fiscal packages to support increased health expenditures and expand social safety nets” and loans and subsidies to keep businesses and financial institutions afloat. Although this response was necessary, it added to already high levels of indebtedness.
Increased debt levels in developing countries raise concerns about global debt sustainability and financial stability. High levels of indebtedness also decreases the ability of countries to balance fiscal vulnerabilities with development objectives, including the financing of the Sustainable Development Goals (SDGs).
Please join CSIS to discuss options for the international financial institutions to deal with this challenge, prevent future debt crises, and provide a better response to China.
