IMF warns of global debt rise, citing Australia

SBS World News Radio: The International Monetary Fund says the world is now a record $152 trillion in debt.

IMF warns of global debt rise, citing AustraliaIMF warns of global debt rise, citing Australia

IMF warns of global debt rise, citing Australia

Global debt levels have dominated the International Monetary Fund's annual meetings taking place in Washington.

In a new report, the IMF says public and private debt combined has reached 225 per cent of global economic output last year.

That is up from 200 per cent in 2002.

The report cites build ups of private debt in countries like Australia, China and Brazil, fuelled in part by a long era of low interest rates, as particularly concerning.

IMF managing director Christine Lagarde has urged the Fund's 189 member governments to do more to boost weak growth if they can.

"Prospects for low income countries are becoming even more challenging, particularly as far as Sub-Saharan Africa is concerned. Overall, and this is a point that I made in Chicago a few days ago, we see growth as too low, for too long and benefiting too few. In and of itself, it is not good news. But it's also fertile ground for political dynamics that can depress global growth even more."

World Bank president Jim Yong Kim says inequality is still far too high, both globally and within countries.

Dr Kim says that can constrain growth and breed instability.

"We need to focus on growth and continue to reduce inequality, and we have to make growth more equitable and more sustainable. Because of the multiple overlapping global shocks, including climate change, forced displacement and pandemics, we have to scale up our efforts dramatically in building resilience."

Ms Lagarde also argues positive growth can have strong impacts on poverty-stricken nations.

"We certainly believe that international trade has been helpful over the course of the last few decades. If you look at the level of growth, that has helped China, that has helped countries like India and other low income countries to pull themselves out of massive poverty. It has been hugely beneficial on an aggregate global basis."

Ms Lagarde has also pushed Deutsche Bank to settle fast with the United States Department of Justice, saying an accord would be preferable to going to court.

The bank is currently embroiled in an investigation tied to residential mortgage-backed securities.

The IMF chief says a bad settlement is always better than a good trial.

 

 


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3 min read

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By Hannah Sinclair

Presented by Santilla Chingaipe


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