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Global Debt Levels Reach Historic Highs, Warns WEF President

Børge Brende, President of the World Economic Forum (WEF), delivered a sobering assessment of the global economy, cautioning that without appropriate economic measures, the world could face a decade of sluggish growth.

Speaking at the WEF’s “Special Meeting on Global Collaboration, Growth, and Energy for Development” in Riyadh, Saudi Arabia, Brende highlighted the alarming similarity of current global debt ratios to those of the early 19th century, explicitly referencing the Napoleonic Wars era.

Brende stressed the need for governments to devise strategies to reduce this mounting debt while implementing prudent fiscal policies that avoid triggering a recession. He also addressed concerns about persistent inflationary pressures and pointed out that generative artificial intelligence could offer opportunities for developing nations.

The IMF’s recent report echoed Brende’s warnings, indicating that global public debt had risen to 93% of GDP and could reach 100% by the decade’s end. Notably, the IMF highlighted China and the United States as having exceptionally high debt levels, with loose fiscal policies in the latter contributing to global economic fragility.

Despite these challenges, Brende acknowledged that the world economy had shown resilience, with the IMF slightly revising its global growth forecast to 3.2% for 2024. However, he cautioned that geopolitical tensions, such as those between Iran and Israel, posed significant risks. Brende emphasised the potential impact of escalated conflicts on oil prices, warning of the damaging consequences for the global economy should such scenarios unfold.

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