$152 trillion global debt risk for world economyStaff Writer | October 10, 2016
The global economic growth is further challenged by the world’s debt, which according to the International Monetary Fund (IMF) has now reached a record $152 trillion.
Global economy The debt is 225% of global GDP
“The sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery,” the Washington DC-based Fund cautions.
This debt burden is mounting at a time when slow growth means inflation and interest rates will remain low, making it hard for companies, individuals and governments to earn their way out of debt.
A combination of low growth, high debt and weak banks could push the world in a dangerous financial and political direction, the IMF warned.
According to the Fund, the debt distribution worldwide was very uneven. It is mainly concentrated in advanced and a few systemically important emerging market economies.
Debt levels are generally lower in low income countries. In some emerging markets, easy financial conditions have led to accumulation of private debt; a case in point is China. ■