World Economic Forum President Warns of Global Debt at Unprecedented Level Since Napoleonic Wars.
By Sanjay Sing
The President of the World Economic Forum, Borge Brende, has warned that global debt has reached an unprecedented level since the Napoleonic Wars, and that this could pose a significant risk to the global economy.
In a speech at the World Economic Forum’s annual meeting in Davos, Switzerland, Brende said that global debt had reached $255 trillion, which is equivalent to 322% of global GDP.
He said that this level of debt was unsustainable and that it could lead to a global financial crisis if it is not addressed.
Brende called on governments and businesses to work together to reduce global debt and to make the global economy more sustainable.
Here are some of the risks associated with high levels of global debt:
- Increased interest rates: As governments and businesses borrow more money, they will have to pay higher interest rates. This can make it more difficult for them to repay their debts and can lead to a vicious cycle of debt and higher interest rates.
- Financial instability: High levels of debt can make the global financial system more unstable. If a major debtor defaults on its debt, it can trigger a chain reaction that could lead to a global financial crisis.
- Economic stagnation: High levels of debt can lead to economic stagnation. When governments and businesses are spending more money on servicing their debts, they have less money to invest in productive activities. This can lead to slower economic growth and lower living standards.
Brende called on governments and businesses to take the following steps to reduce global debt and make the global economy more sustainable:
- Reduce government spending: Governments should reduce their spending and bring their budgets into balance. This will help to reduce the amount of debt that they have to issue.
- Increase taxes: Governments should increase taxes on the wealthy and on corporations. This will help to generate revenue that can be used to reduce government debt.
- Promote economic growth: Governments and businesses should work together to promote economic growth. This will help to generate revenue that can be used to reduce debt and will also make the global economy more sustainable.
Brende warned that the world is facing a debt crisis and that it is important to take action now to reduce global debt and make the global economy more sustainable.
Kind regards Sanjay Sing.
