World on brink of financial crash as ‘wave of debt’ threatens ‘unhappy ending’

In its biannual Global Economic Prospects (GPE) report, the organisation warned of a “debt accumulation wave” which could have an “unhappy ending”. 

In the report, the World bank highlighted four waves of debat accumulation.

The previous three all ended in a financial crisis in many developing countries. 

The current wave started in 2010 and according to the organisation, it is “the largest, fastest and most broad-based increase” since the 1970s. 

Ayhan Kose, director of the World Bank’s Prospects Group, said in the report: “Low global interest rates provide only a precarious protection against financial crises.

“The history of past waves of debt accumulation shows that these waves tend to have unhappy endings.

“In a fragile global environment, policy improvements are critical to minimize the risks associated with the current debt wave.”

More to follow…