Due to Corona virus imposed government spending, developed countries have pushed public debt figures to the levels last seen in the years after World War 2.

According to the International Monetary Fund IMF advanced economies gross debt now amounts to 122.4% of global gross domestic product. While in 1946, it came to 124% of GDP. For example, United States gross public debt has in 1946 amounted to 121.1% of GDP, while now it stands at 131.07% of GDP. One of the countries most strongly hit by WWII – United Kingdom – in 1946 had its gross public debt at 269.8% of GDP, while today it is at level of 95.7%.

Advanced economies are fighting against pandemic caused by Covid-19 with government spending and slowing of economies, therefore this event can be compared to World War II era. Back then economies quickly recuperated and brought down their debt. Unites States had gross public debt ratio at 62.3% of GDP in 1956 due to strong growth in population and industrialisation. Also in ten years after WWII, United Kingdom had dwindled its gross public debt ratio to 143.8%. Since we are now witnessing reverse processes in advanced economies (decrease in population and outsourcing of industry) it is quite difficult to predict how long it will take for developed countries to bring down their debt.

Gross debt position (% of GDP)

Source: International Monetary Fund

According to IMF advanced economies are the following: Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong SAR, Iceland, Ireland, Israel, Italy, Japan, Korea, Republic of, Latvia, Lithuania, Luxembourg, Malta, Netherlands, New Zealand, Norway, Portugal, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States.