The world is still drowning in debt

Almost eight years after the credit crunch began, the world’s debt pile is higher than ever – but don't count on us making much of a dent in it.

You might think that the global economy would have worked off some debt a few years after a debt crisis. But you'd be wrong. Almost eight years after the credit crunch began, the world's debt pile is higher than ever and odds are we won't make much of a dent in it over the next few years. High debt levels undermine growth and make households and governments more vulnerable to financial crises. So little has changed since 2007.

Between the end of 2007 and July 2014, the world added $57trn to its borrowings, according to McKinsey Global Institute. The consultancy has totted up public, household, financial sector, and corporate debt (for companies outside the financial sector). Overall, debt is now $199trn, or 286% of global GDP. That's up from 269% in 2007.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.