BBC, By Robert Peston, February 4
After the explosion of borrowing in the boom years that led to the great crash and recession of 2007-08, most governments – especially those of rich developed countries – said they would embark on policies that would lead to greater saving, debt reduction and what’s known as deleveraging.
They implied they would encourage prudence, so that the sum of household, business and government debt would fall.
So what has actually happened to global debt?
According to a new study by the influential consultancy McKinsey Global Institute, global debt has grown by $57tn or 17 percentage points of GDP or worldwide income since 2007, to stand at $199tn, equivalent to 286% of GDP.
And the single biggest contributor to the rise and rise of global indebtedness is that government debts have increased by $25tn over these seven years.
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