Global debt has reached a record high $188 trillion, or about 230 percent of the world's economic output, International Monetary Fund chief Kristalina Georgieva said Thursday, while warning of the risks such debt poses to financial stability.
"Public debt in advanced economies is at levels not seen since the Second World War. Emerging market public debt is at levels last seen during the 1980s debt crisis," Georgieva said in a speech at the Washington-based institution.
According to the IMF managing director, the recent buildup of public debt in advanced economies is largely a result of the policy response to the global financial crisis triggered by the 2008 collapse of U.S. investment bank Lehman Brothers Holdings Inc.
In developing countries, meanwhile, the debt increase reflects sharp declines in commodity prices, natural disasters, civil conflict and high investment spending on unproductive projects, she said.
The IMF said in December last year that global debt totaled $184 trillion in 2017, the highest level on record at that time.
In the speech, Georgieva stressed the importance of ensuring "more sustainable" borrowing such as by focusing on investment projects with "credibly high rates of return" and enhancing transparency in borrowing and lending practices.
She also called for better collaboration between borrower countries and lenders to improve the disclosure of debt contracts, which can help reduce risks and increase accountability.
China has been criticized by the United States for its "debt-trap diplomacy" that allegedly lacks transparency in lending and can burden countries with high debt under its Belt and Road infrastructure development initiative.