Read the Beforeitsnews.com story here. Advertise at Before It's News here.
Profile image
By Human Wrongs Watch
Contributor profile | More stories
Story Views
Now:
Last hour:
Last 24 hours:
Total:

Global Wave of Debt Is Largest, Fastest in 50 Years

% of readers think this story is Fact. Add your two cents.


WASHINGTON (World Bank)* — Debt in emerging and developing economies (EMDEs) climbed to a record US$55 trillion in 2018, marking an eight-year surge that has been the largest, fastest, and most broad-based in nearly five decades, according to a new World Bank Group study that urges policymakers to act promptly to strengthen their economic policies and make them less vulnerable to financial shocks.

The analysis is contained in Global Waves of Debt, a comprehensive study of the four major episodes of debt accumulation that have occurred in more than 100 countries since 1970.

It found that the debt-to-GDP ratio of developing countries has climbed 54 percentage points to 168 percent since the debt buildup began in 2010. On average, that ratio has risen by about seven percentage points a year—nearly three times as fast it did during the Latin America debt crisis of the 1970s.

The increase, moreover, has been exceptionally broad-based—involving government as well as private debt, and observable in virtually all regions across the world.

“The size, speed, and breadth of the latest debt wave should concern us all,” said World Bank Group President David Malpass. “It underscores why debt management and transparency need to be top priorities for policymakers—so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people.”

According to the report, the prevalence of historically low global interest rates mitigates the risk of a crisis for now. But the record of the past 50 years highlights the dangers: Since 1970, about half of the 521 national episodes of rapid debt growth in developing countries have been accompanied by financial crises that significantly weakened per-capita income and investment.

“History shows that large debt surges often coincide with financial crises in developing countries, at great cost to the population,” said Ceyla Pazarbasioglu, the World Bank Group’s Vice President for Equitable Growth, Finance, and Institutions. “Policymakers should act promptly to enhance debt sustainability and reduce exposure to economic shocks.”

The analysis found that this latest wave is different from the previous three in several ways—it involves a simultaneous buildup in both public and private debt; it involves new types of creditors; and it is not limited to one or two regions. Some of the increase in debt has been driven by China, whose debt-to-GDP ratio has risen 72 points to 255 percent since 2010. But debt is substantially higher in developing countries even if China is excluded from the analysis—among EMDEs, it is twice the nominal level reached in 2007.

Those characteristics pose challenges that policymakers haven’t had to tackle before. For example, nonresident investors today account for 50 percent of the government debt of EMDEs, considerably more than in 2010. For low-income countries, much of this debt has been on non-concessional terms, and outside the debt-resolution framework of the Paris Club.

Under the circumstances, policymakers should develop mechanisms to facilitate debt resolution when it becomes necessary, according to the report. Greater debt transparency would also help.

Last Updated: Dec 19, 2019

*SOURCE: World Bank. Go to ORIGINAL. 2020 Human Wrongs Watch



Source: https://human-wrongs-watch.net/2020/01/03/global-wave-of-debt-is-largest-fastest-in-50-years/


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!


Order by Phone at 888-809-8385 or online at https://mitocopper.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomic.com M - F 9am to 5pm EST

Order by Phone at 888-388-7003 or online at https://www.herbanomics.com M - F 9am to 5pm EST


Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)
Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen! 
Nascent Iodine - Promotes detoxification, mental focus and thyroid health.
Smart Meter Cover -  Reduces Smart Meter radiation by 96%!  (See Video)

Immusist Beverage Concentrate - Proprietary blend, formulated to reduce inflammation while hydrating and oxygenating the cells.

Report abuse

    Comments

    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Total 1 comment
    MOST RECENT
    Load more ...

    SignUp

    Login

    Newsletter

    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.