In the latest in its series of reports on debt and deleveraging, the McKinsey Global Institute (MGI) has created a Tableau data visualization that shows the evolution of different types of debt across 51 countries, including the debt of households, nonfinancial corporations, and governments. This data visualization enables users to see the amount of debt outstanding expressed in either US dollar terms or as a percent of national GDP since 2000.
Since the financial crisis of 2008, global debt has continued to rise. Total debt has increased by $72 trillion, or 74 percent, from $97 trillion in 2007 to $169 trillion in the first half of 2017. Government debt accounts for 43 percent of this increase, and nonfinancial corporate debt for 41 percent.
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Japan has the highest level of government debt to GDP of any of the 51 countries, at 214 percent in the second quarter of 2017, and international financial centers Hong Kong and Luxembourg top the list for nonfinancial corporate debt to GDP, largely reflecting the activities of foreign companies. China’s total debt has quadrupled over the last decade, a rise of $32 trillion, fueled by debt of the nonfinancial corporate sector. By contrast, the economies of Germany, Portugal, and Spain have been deleveraging over the past few years, with declining total debt relative to GDP.
One notable new feature of global debt markets is the near-threefold expansion of corporate bond markets over the past decade, as the largest companies have been shifting from bank loans to bond financing. We explore this trend and the potential risks it may entail in a new McKinsey Global Institute discussion paper Rising corporate debt: Peril or promise? and MGI’s 2015 report, Debt and (not much) deleveraging.