World Bank warns against the prospects of upcoming debt crisis


The risk of a new debt crisis being on the horizon has been highlighted again by the World Bank after they had warned about the biggest buildup in the last five decades borrowing.

In their prospects for half a year, the organization which is based in Washington has said that the four waves of the accumulation of debt since the year 1970s was the fastest, largest and the broadest based.

The World Bank provides grants and loans to the economies which are developing and emerging for the tackling of poverty has said that there may still be a crisis although the rates of interest which were at their lowest had been making these debts way more manageable.

Ayhan Kose who is an official of the World Bank has said that the low rates of interest across the globe are going to be providing a very precarious protection against the crises that the global economies

The accumulation of debt in the past has shown that the waves don’t usually end well. In the global environment that is fragile, the improvements in policy are critical of the minimalization of risks had been associated with the waves of the current debt

The debt of the developing economies has reached a total of close to 170% of the gross domestic product in the year 2018 or an amount of $55tn which has seen an increase of 54 percentage points in the GDP after 2010. China has been accounting for most of this increase partly because of the size. The build-up had been broad based and had included the other economies which were big such as Brazil and a few other countries.

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