The Bulgarian has warned that addressing this problem "is more important than ever", because the current record level of debt poses risks to economic and financial stability. Also, Georgieva has indicated that a high debt can also become a drag on growth and development.
The IMF director has pointed out that high levels of debt "make many governments, businesses and households vulnerable to a sudden tightening of financial conditions."
In this sense, given the uncertainties posed by challenges such as 'Brexit', commercial and geopolitical tensions, Georgieva has pointed out that investor confidence could change and leave the most vulnerable debtors exposed to the tightening of financial conditions due to interests higher, thus making repayment of loans difficult.
"This, in turn, could amplify market corrections and intensify capital outflows from emerging markets," he said.
However, despite these global problems, the IMF director has indicated that in economies with budgetary margin such as Germany, the Netherlands or South Korea, an increase in spending, especially in infrastructure and R&D, could boost demand and potential growth
"Where there is fiscal space, indebtedness can also help countries to increase spending to meet sustainable development goals," Georgieva added, adding that this, in turn, requires building trust through sound macroeconomic policies and A cozy business environment.
. (tagsToTranslate) global (t) billion (t) GDP (t) worldwide (t) IMF