United Kingdom External Debt as a % of GDP Highlights in 2020
The United Kingdom’s external debt as a % of GDP hit 344.8% in 2020, an increase of 13.6% over the previous year. Between 2010 to 2020, the United Kingdom’s external debt as a % of GDP decreased by 6.5%.
The government debt has been severely impacted due to various support measures and low tax revenues, due to the outbreak of the coronavirus pandemic. According to the IMF, the general government gross debt increased to 108.5% of GDP in 2021, compared to 104.5% of GDP in 2020. The general government gross debt was recorded at 85.2% of GDP in 2019. The increase in government debt will negatively affect the economy in the long run, as funds that could have been used for productive investment had to be diverted to paying interest on debts.
Outlook on Global Economy
Real GDP is measured using inflation-adjusted base year prices. Real GDP changes are a measure of economic growth and show whether there has been an increase or decrease in the volume of economic activity.
According to real GDP, the world's top five economies are the United States, China, Japan, Germany, and India. After the US, China had the largest real GDP in 2021 with a value of $12.7 trillion in 2021. With a $6 trillion real GDP during the same period, Japan came in third place globally. Germany and India are the other two largest leading economies, with real GDPs of $3.8 trillion and $2.9 trillion, respectively.
Factors Affecting the Global Economy:
A rise in COVID-19 cases:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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