World debt records $164 trillion |
The world`s debt load has ballooned to a record $164 trillion, a trend that could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten, the International Monetary Fund (IMF) said. Global public and private debt swelled to 225 per cent of global gross domestic product in 2016, the last year for which the IMF provided figures, the fund said. The global debt burden clouded the IMF`s otherwise upbeat outlook of the world economy, which is in its strongest upswing since 2011. The fund earlier forecast expansion of 3.9 per cent in 2018 and 2019, while saying in subsequent years the global economy could be impacted by tighter monetary policy and the fading effects of US fiscal stimulus. Surging private-sector debt, particularly in China, is driving the build-up. China has accounted for almost three-quarters of the increase in private debt since the global financial crisis, according to the fund. High levels of sovereign debt could make it difficult for governments to refinance when their debt reaches maturity, especially if financing conditions tighten, the IMF said. Large debts also impede the ability of nations to increase spending if their economies fall into recession, and may cause a drag on growth, according to the fund.
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