Reportedly, global debt has reached a record high of more than $250 Trillion in the first half of 2019, led by a pitch in borrowings in China and the U.S., as per the latest report. The report was released by the IIF (International Institute of Finance), demonstrated that international debt increased by $7.5 Trillion in the first 6 Months of 2019. The IIF stated the general number strike $250.9 Trillion at the end of this time, and will surpass $255 Trillion by 2019. The IIF said, “The U.S. and China summed up for more than 60% of the surge. Likewise, EM (emerging market) debt also attained a new record of $71.4 Trillion, which is 220% of GDP (gross domestic product). With few indications of decelerating in the rate of debt amassing, we project that international debt will exceed $255 Trillion this year.”
Increasing debt across the globe has been a major concern for shareholders and has also been signaled as the next game-changer by many economists. The record-low interest rate makes it very easy for sovereigns and corporates to lend more money. The IIF report stated, “Nevertheless, with lessening scope for additional monetary easing in several parts of the globe, nations having high levels of administration debt (Lebanon and Italy)—plus those where government debt is rising rapidly (Brazil, South Africa, Argentina, and Greece)—might find it tougher to turn to financial stimulus.”
On a related note, earlier, the IMF (International Monetary Fund) cautioned that global arrears attained an all-time high of $188 Trillion, which is more than double the international economic output. Kristalina Georgieva—IMF’s Chief—said that the global debt load has climbed to a new record of almost 230% of the world’s productivity. Whilst private sector lending accounts for the huge majority of the total, the surge places individuals and governments at risk if the financial system slows down, she said.
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