Saudi Arabia’s corporate, household debt declines: IIF

Saudi Arabia's household debt has come down from 12.8 percent of the Kingdom’s GDP in Q3 2017 to 11.8 percent in Q3 2018. Corporate debt levels have also declined during the same period, as per the latest data released by the Institute of International Finance (IIF).

Non-financial corporate debt dropped from 48.8 percent of GDP in Q3 2017 to 44.5 percent in Q3 last year, while financial corporate debt reduced from 4.5 percent to 4 percent during the same period, IIF data show.

Saudi government debt, however, went up from 16.1 percent in Q3 2017 to 18.3 percent of GDP during the said period.

Global debt, on the other hand, grew by over 12 percent (or $27 trillion) since 2016, reaching $244 trillion (318 percent of GDP) in Q3 2018, IIF report said.

The corporate sector accounted for over a third of the rise, putting debt/GDP at a record high of 92 percent of GDP. Household debt in emerging markets topped $12 trillion in Q3, up from $9.3 trillion in 2016, IIF added.

Noting that global debt is now more than 3 times the size of the world economy, IIF report said global debt has risen over 3 percentage points since 2017, exceeding 318 percent of GDP in Q3 2018.

This is however slightly lower than the all-time high of 320 percent in Q3 2016, helped by the cyclical pickup in global growth in 2017-18, IIF report added.

The corporate sector (ex-financials) and governments worldwide have accounted for over 75% of the rise in global debt levels since 2008.

Total government debt exceeded $65 trillion in 2018, up from $37 trillion a decade ago, IIF said. Over the same period, non-financial corporate debt rose by $27 trillion to over $72 trillion last year, now hovering near a record high of 92 percent of GDP.

There has also been rapid growth in EM household debt, IIF report noted.

Since 2016, debt has been growing fastest in the household sector in emerging markets, up 30 percent to over $12 trillion. China has accounted for much of this growth, with household debt up some 45 percent to $6.8 trillion in nominal terms.

However, Czech Republic, India, Mexico, Korea, Malaysia, and Chile have all seen household debt grow by over 20% since 2016. A few mature markets—notably France, Belgium and Finland—have also seen significant growth in household debt.