HomeBusinessIMF Chief Kristalina Georgieva says, "Global debt surges record-high to $188 trillion"

IMF Chief Kristalina Georgieva says, “Global debt surges record-high to $188 trillion”

Date:

Trending

- Advertisement -
Advertise During Budget
Advertise During Budget
Advertise During Budget
Advertise During Budget

The global debt load has surged to a new all-time record equivalent to more than double the world’s economic output, IMF chief Kristalina Georgieva warned November 7.

While private-sector borrowing accounts for the vast majority of the total, the rise puts governments and individuals at risk if the economy slows, she said.

- Advertisement -

“Global debt — both public and private — has reached an all-time high of $188 trillion. This amounts to about 230 percent of world output,” Georgieva said in a speech to open a two-day conference on debt.

That is up from the previous record of $164 trillion in 2016, according to IMF figures.

While interest rates remain low, borrowers can use debt to make investments in productive activities or weather a bout of low commodity prices.

But it can become “a drag on growth,” she said.

- Advertisement -

“The bottom line is that high debt burdens have left many governments, companies, and households vulnerable to a sudden tightening of financial conditions,” she cautioned.

Corporate debt accounts for about two thirds of the total but government borrowing has risen as well in the wake of the global financial crisis.

- Advertisement -

“Public debt in advanced economies is at levels not seen since the Second World War,” she warned. And “emerging market public debt is at levels last seen during the 1980s debt crisis.”

She called for steps to ensure “borrowing is more sustainable,” including making lending practices more transparent and preparing for debt restructuring with “non-traditional lenders” — an apparent reference to China, which has become a major creditor to developing nations including in Africa.

THE SNAPSHOTS, IN YOUR INBOX

Get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -
Krishna Mali
Krishna Mali
Founder, CEO & Group Editor of TechGraph.
spot_img

More Latest Stories

Related Stories