Worldwide debt rises to record $226 trn - 3 times more than economic output

Worldwide debt has risen to a record $226 trillion - more than three times global annual economic output - and firms in more countries are struggling to service loans, a study shows, just as key central banks prepare to end super-cheap credit policies.

World markets are expected to get confirmation over the next week that normalising global interest rates from the extraordinarily low levels introduced to offset the fallout of the 2009 credit crash is no longer just a U.S. phenomena.

The European Central Bank will lay out cuts to its 2-1/2 year-old stimulus programme on Thursday, the Bank of England looks set to raise British interest rates for the first time in a decade, while the Fed is moving towards its third hike of the year.

Years of cheap central bank cash has pushed world stock markets to successive record highs. But another side effect has been explosive credit growth as households, companies and governments took advantage of rock-bottom borrowing costs.

Global debt now amounts to 324 percent of the world's annual economic output, the Institute of International Finance (IIF) said in a report on Wednesday.

One of the most authoritative trackers of global capital flows, the IIF report also highlighted "rollover" risks, especially in emerging markets that have borrowed in hard currencies such as euros and dollars.
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US first-quarter growth weakest in three years as consumer spending falters

BREAKING NEWS - The US economy grew at its weakest pace in three years in the first quarter as consumer spending barely increased and businesses invested less on inventories, in a potential setback to President Donald Trump's promise to boost growth.

Gross domestic product increased at a 0.7 per cent annual rate also as the government cut back on defence spending, the Commerce Department said on Friday. That was the weakest performance since the first quarter of 2014.

The economy grew at a 2.1 percent pace in the fourth quarter. Economists polled by Reuters had forecast GDP rising at a 1.2 percent pace last quarter. The survey was, however, conducted before Thursday's advance data on the March goods trade deficit and inventories, which saw many economists lowering their first-quarter growth estimates.

The pedestrian first-quarter growth pace is, however, not a true picture of the economy's health. The labour market is near full employment and consumer confidence is near multi-year highs, suggesting that the mostly weather-induced sharp slowdown in consumer spending is probably temporary.

A measure of private domestic demand increased at a 2.2 per cent rate last quarter. The first-quarter GDP tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to rectify.
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