World debt hits record $164 trillion as crisis hangover lingers

  • 1
    Share

New Delhi, Apr 20: 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 in its semi-annual Fiscal Monitor report. The previous peak was in 2009, according to the Washington-based fund.
“One hundred and sixty-four trillion is a huge number,” Vitor Gaspar, head of the IMF’s fiscal affairs department, said in an interview. “When we talk about the risks looming on the horizon, one of the risks has to do with the high level of public and private debt.”
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 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.
The IMF figures lay bare the scale of the debt hangover from which the world is still recovering a decade after the financial crisis pushed the global banking system to the brink and tipped the world economy into recession.