The volume of global debt reached its highest level last September, hitting $253 trillion, the Institute of International Finance (IIF) announced yesterday, adding that it was set to grow in 2020.
The IIF report said the debt increase was mainly driven by large borrowing by governments and non-financial corporations, marking an uplift from $250.9 trillion at the end of the second quarter of 2019.
“The world’s debt when compared against its total output hit another all-time high of over 322 per cent in the third quarter of 2019 and it is set to keep growing,” the report added.
“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, driven mainly by non-financial sector debt,” the IFF warned.
Global record-low interest rates in countries have made it easier and more attractive for corporations, individuals and governments to borrow from banks, and thus incur more debt. However, higher borrowing levels were reported by economists to have stressed the global economic environment.