The International Monetary Fund has been sending out a lot of warning signals about the global economy recently. Here’s another. According to the Fund, the world is awash in one hundred and fifty two trillion dollars of debt, an all time high that sits at more than double the amount of debt owed at the turn of the century.
As reported by CNBC, a prolonged stretch of low interest rates that persists in much of the world had led many corporations to take advantage of favorable terms and to issue aggressive levels of debt. The International Monetary Fund is working to pinpoint the biggest sources of risk to the global financial system, noting that not only is private debt elevated among advanced economies, but in several systemically important emerging market economies like China and Brazil.
The Fund has singled out China as a nation at risk of a disorderly wind down from presently high corporate debt levels. The world’s governments collectively accounts for approximately one third of the world’s debt, and public sector indebtedness has also been climbing.
