Global debt reaches US$ 217 trillion

The Institute of International Finance (IIF) Global Debt Monitor 2017 report shows that growth in global debt has slowed over the past several years, particularly in mature economies. However, Emerging Market economies borrowing more heavily, global debt has set a new record high of USD217 trillion (over 327% of GDP) in early 2017.

The IIF report highlighted “rollover” risks, especially in emerging markets that have borrowed in hard currencies such as euros and dollars.

Such debts will become costlier to service if Western interest rates rise and currencies strengthen.

While U.S. interest rates have already been raised four times, the euro has surged to one-year highs after Draghi’s comments on Tuesday, while German 10-year government bond yields – the benchmark for euro area borrowing – have doubled over the past two days.

There was a $3 trillion rise in debt levels across the developing world, which have debt totalling $56 trillion. That is 218 per cent of their combined GDP, a five percentage point rise over year-ago levels, it said.

China accounted for $2 trillion of this rise, with its debt now at almost $33 trillion.

Advanced economies had continued to deleverage, cutting total public and private debt by more than $2 trillion in the past year, but this was mainly due to the euro zone. Total U.S. debt rose $2 trillion to more than $63 trillion by the first quarter of this year.

Jim Rogers who made his fortune along with George Soros in commodities and currencies has been declaring that the world will have a terrible financial crash. Jim is indicating that the risks levels are high because of the high global debt levels.

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