The International Monetary Fund (IMF) Director of Fiscal Affairs Department, Vitor Gasper has said that India’s debt is lower than the best or emerging market economies in the world, while the global debt has reached a new record high of $182 trillion in 2017. According to the latest IMF data, in India, private debt in 2017 was 54.5% of the Gross Domestic Product (GDP) and the general government debt was 70.4% of the GDP, a total debt of about 125 of the GDP. In comparison, debt of China was 247% of the GDP. So, the country’s debt is substantially less than the global debt as percentage of world GDP.
Gasper noted that there is a positive relation between the debt to GDP ratio and the level of GDP per capita. If you compare around the world with the best economies or emerging market economies, the level of debt in India is lower. He added that debt in advanced economies, since the global financial crisis, has increased quite substantially while the private sector has been very gradually leveraging. In the last few years in India private debt has declined from almost 60% to 54.5.
IMF Director of Fiscal Affairs Department further said ‘So, it's very stable. So, what you do see is that emerging market economies, which is where India is, there's a very fast buildup in private debt with a slowdown in the last two years, but India is basically steady. So, India is not an emerging market economy where leveraging is progressing fast.’ According to him, in emerging market economies private debt has risen much faster than public debt.
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