The International Monetary Fund (IMF) has raised the alarm that global debt may hit $180trillion
The body therefore said there was the need for a rethink on protectionism policies of several countries across the world, saying about three-quarters of a per cent of global GDP could be lost by 2020 if the trade tensions persist.
Managing director of the Fund, Ms Christine Largade, speaking at the conclusion of the Group of 20 (G-20) Summit in Buenos Aires, Argentina also cautioned on the rising global debt which she put at $182 trillion.
She advised the G-20 to address financial risks, using micro- and macro-prudential tools to tackle problems related to leveraged lending, deteriorating credit quality, and high exposure to foreign currency or foreign-owned debt.
According to her, an urgent issue that the G-20 needs to address was the excessive level of global debt which is about $182 trillion by the IMF’s estimate.
Noting that global growth remains strong, she said it was moderating and becoming more uneven.
“Pressures on emerging markets have been rising and trade tensions have begun to have a negative impact, increasing downside risks. Choosing the right policy is therefore critical for individual economies, the global economy, and for people everywhere.
“The choice is especially stark regarding trade. We estimate that, if recently raised and threatened tariffs were to remain in place and announced tariffs were implemented, about three-quarters of a percent of global GDP could be lost by 2020.”