The drop of 4 percentage points for public debt, to 96 per cent of GDP, was the largest such decline in decades.
The IMF said unusually large fluctuations in the debt ratio – or the “global debt rollercoaster” – were caused by the economic rebound from COVID-19 and ensuring a rapid rise in inflation.
repayment concerns
Credit dynamics differ widely across country groups. Advanced economies saw the biggest declines in debt, with both public and private debt falling 5 percent of GDP last year, followed by similar results in emerging markets except China.
But low-income countries saw their total debt ratios continue to rise in 2021, with total debt reaching 88 percent of GDP, driven by higher private debt.
There are growing concerns about the ability of low- and middle-income countries to service their debt, with an estimated 25 percent of emerging market countries and more than 60 percent of low-income countries either in or near debt crisis.