'Such massive worldwide debt is a real risk for the global economy, especially because the IIF expects levels to rise even further in 2020.
"Spurred by low interest rates and loose financial conditions, we estimate that total global debt will exceed $257 trillion" in the first quarter of 2020, the IIF said.
The Federal Reserve lowered interest rates three times last year, and the European Central Bank's benchmark rate is still at its post-financial crisis lows.
Despite favorable borrowing conditions, the refinancing risk is massive. A total of more than $19 trillion of syndicated loans and bonds will mature in 2020. It's unlikely that all of these will be refinanced or repaid.''The world's already huge debt load smashed the record for the highest debt-to-GDP ratio before 2019 was even over.
In fact, it broke that record in the first nine months of last year. Global debt, which comprises borrowings from households, governments and companies, grew by $9 trillion to nearly $253 trillion during that period, according to the Institute of International Finance.
That puts the global debt-to-GDP ratio at 322%, narrowly surpassing 2016 as the highest level on record.
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China's ratio of debt to GDP, for example, is approaching 310%, the highest level in the developing world. Investors have long kept a skeptical eye on the highly-leveraged country. Following a push for Chinese companies to reduce their borrowing in 2017 and 2018, debt levels rose again last year, the IIF said in its Global Debt Monitor report.
Such massive worldwide debt is a real risk for the global economy, especially because the IIF expects levels to rise even further in 2020.
"Spurred by low interest rates and loose financial conditions, we estimate that total global debt will exceed $257 trillion" in the first quarter of 2020, the IIF said.
The Federal Reserve lowered interest rates three times last year, and the European Central Bank's benchmark rate is still at its post-financial crisis lows.
Despite favorable borrowing conditions, the refinancing risk is massive. A total of more than $19 trillion of syndicated loans and bonds will mature in 2020. It's unlikely that all of these will be refinanced or repaid.
Another issue that the report brings up is the financing needs for urgent climate change action.
The United Nations' Sustainable Development Goals require $42 trillion of infrastructure investments by 2030, but "countries with limited borrowing capacity could face severe challenges in meeting development finance needs," the IIF said.'
- Anneken Tappe,
The world is drowning in debt, January 14, 2020
Context'..here we are in 2020 with Bubbles everywhere..'