The world is now deeper in debt than it was at the peak of the financial crisis in 2009, says the International Monetary Fund (IMF). China was described as a “driving force” behind the new debt levels.
Thanks to the US Federal Reserve, the global debt is at a historical high, reaching the equivalent of 225% of GDP. The USA alone is responsible for 14% of this total global debt, while other countries created debt to save the dollar from derailing all together.
The ballooning debt could make it harder for countries to respond to the next recession and pay off debts if financing conditions tighten. Over half of the US debt has been covered by China.
It said that China has accounted for almost three-quarters of the increase in private debt since the global financial crisis. Japan and the USA account for more than half of the global debt.
IMF urged the USA, whose budget deficit is expected to surpass $1 trillion by 2020, to “recalibrate” its fiscal policy so government debt-to-GDP levels decline over the medium term.
RT.com / ABC Flash Point Economy News 2018.