The IMF has expressed its concern over the rising global debt stock which it noted had surged 60 percent and reaching well above the time of 2008 depression.
The Breton Woods institution therefore warns that another global financial crisis looms as the impact of the huge debt burden continues to hurt national economies globally.
Specifically, the IMF Managing Director, Christine Lagarde, disclosed that the total global debt had surged 60 percent in both private and public sectors, reaching the all-time high at $182 trillion which is another concerning point.
The IMF stated further: “The sequence of aftershocks and policy responses that followed the Lehman bankruptcy has led to a world economy in which the median general government debt-GDP ratio stands at 52%, up from 36% before the crisis; central bank balance sheets, particularly in advanced economies, are several multiples of the size they were before the crisis; and emerging market and developing economies now account for 60% of global GDP in purchasing-power-parity terms – which compares with 44% in the decade before the crisis – reflecting, in part, a weak recovery in advanced economies.”
Now, the International Monetary Fund (IMF) is warning about another financial meltdown, hinging the causes for concern on the dramatic rise in lending and failure to impose tough restrictions on asset managers handling trillion dollar funds and insurance companies.
According to Lagarde, this is all making the governments and companies of developing worlds more vulnerable to destabilization, a development which “should serve as a wake-up call.”
The annual economic outlook of IMF in a separate analysis warns of the “large challenges” that loom over economies to prevent the “second Great Depression”.
It would be recalled that over the past few months, financial experts have already come out and projected the upcoming financial crisis in 2020.
