Tag Archives: IMF Financial Stability Report

Remember deleveraging?

There is a lot of interesting stuff in the latest IMF Financial Stability Report. After much research on global debts levels (as per this post in 2014 and this one in 2015) over the past few years, the graph below on G20 gross debt levels from the IMF shows how little progress has been made.

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When looked at by advanced economy, the trend in gross debt from 2006 to 2016 looks startling, particularly for government debt.

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As the IMF state, “one lesson from the global financial crisis is that excessive debt that creates debt servicing problems can lead to financial strains” and “another lesson is that gross liabilities matter”.

The question does arise as to the economic impact of these debt levels if interest rates start to rise across advanced economies?