Bloomberg said that the global economy is facing a $100 trillion debt time bomb, which weighs heavily on it and poses significant economic and financial burdens on advanced countries, most notably the United States, China, and European countries.
The agency categorically stated in its report that the International Monetary Fund always warns of the danger and huge value of global debt.
Moreover, it urges major countries to tighten their belts, ahead of the annual meeting of finance ministers and heads of major central banks, which the Fund will organize in a few days in Washington.
On a significant issue, Bloomberg pointed out that two weeks before the US presidential elections, which may determine the future economic policy of the United States, and with the end of the global inflation crisis, finance ministers and central bank governors around the world are facing intense calls to put their countries’ financial affairs in order.
The IMF’s annual meetings are expected to witness a warning about global debt levels that will reach $100 trillion this year, driven by Chinese and American government debts, while the Fund’s Director, Kristalina Georgieva, stressed how the size of global debt, burdens the global economy.
The IMF stressed upon by calling on governments to reduce these debts and rebuild their financial reserves for any future global financial shocks.
Highlights
Bloomberg quoted experts as saying that US home sales reports had shown that lower mortgage interest rates had helped to stabilize the market, and that they had expected modest increases in home sales in September.
The agency said that among the economic reports in the Euro zone that will be the most important events include consumer confidence, purchasing managers’ indices and the inflation expectations of the European Central Bank, expecting that Chinese banks, with the support of the central bank, will join the campaign aimed at reviving business activity by cutting the basic interest rates on loans.
Nonetheless, interest rates on loans for one year are expected to fall by 0.2% to 3.15%, or for five years by 0.2% as well to 3.65%.
Higher borrowing costs
The International Monetary Fund said that high levels of global debt and uncertainty surrounding financial policies in major countries, such as China and the United States, could result in significant side effects such as; higher borrowing costs and risks associated with debt in other economies.
