The global debt load has surged to a new all-time record equivalent to more than double the world’s economic output, IMF chief Kristalina Georgieva warned Thursday.
While private sector borrowing accounts for the vast majority of the total, the rise puts governments and individuals at risk if the economy slows, she said.
“Global debt — both public and private — has reached an all-time high of $188 trillion. This amounts to about 230 percent of world output,” Georgieva said in a speech to open a two-day conference on debt.
That is up from the previous record of $164 trillion in 2016, according to IMF figures.
While interest rates remain low, borrowers can use debt to make investments in productive activities or weather a bout of low commodity prices.
But it can become “a drag on growth,” she said.
“The bottom line is that high debt burdens have left many governments, companies, and households vulnerable to a sudden tightening of financial conditions,” she cautioned.