World Bank red flags $237-trillion debt amid rising interest rates

Global debt is becoming a bigger worry as the global policy tightening cycle takes hold, a top boss at the World Bank warned Monday. “After a decade of low interest rates, the corporate and public debt in many places has ballooned to a staggering $164 trillion,” Kristalina Georgieva, chief executive officer of the World Bank, said in an interview in Singapore on Monday with Bloomberg Television’s David Ingles and Haidi Lun. “With interest rates going up, that attention on debt sustainability has to be stronger.”Central banks across the world are under pressure to follow a Federal Reserve that’s raising interest rates faster than initially anticipated, putting particular stress on emerging markets and developing economies. 

The need for structural policy changes, including responses to waves of anti-globalisation, remains great as policy makers in most economies haven’t taken sufficient action during the extended period of low borrowing costs, Georgieva said. “We don’t see many countries taking advantage of this period of strong economic growth to carry forward structural reforms,” she said. “And our advice to countries is, do not wait. Good times may not last — they usually do not last forever.”