There were numerous promises to tackle debt after the global financial crisis in 2007. But eight years on, consultancy McKinsey and Co says the world's debt mountain is now almost $200 trillion - up by $57 trillion. Kirsty Basset reports.
The world is still addicted to debt. Global debt levels show no sign of abating - despite promises made after the financial crisis to reduce borrowing. A new report by McKinsey shows governments, households, companies and banks owe $57 trillion more than they did in 2007, or 17 per cent of GDP. Ireland, Singapore, Greece, Portugal and China have seen their debts grow the most - while only five of the big economies managed to reduce their debt burden. Edward Hadas is Reuters' BreakingViews economics editor. (SOUNDBITE)(English) REUTERS BREAKING VIEWS ECONOMICS EDITOR EDWARD HADAS SAYING: "That has to be concerning, because excessive levels of debt were identified as one of the main causes of the last crisis." Governments have borrowed heavily to fund bailouts and help boost demand in the recession. Household debt too has risen. McKinsey warns seven countries may face 'potential vulnerabilities'- because of it. It's also a concern in China, where almost half of household debt is linked to real estate. Since 2007, borrowing in China has quadrupled. It's now 282 percent of GDP - almost double what it was. (SOUNDBITE)(English) REUTERS BREAKING VIEWS ECONOMICS EDITOR EDWARD HADAS SAYING: "I think that debts do causes crises. And I think China's very vulnerable. Fortunately the Chinese economy's somewhat isolated. So a Chinese debt crisis is unlikely to travel too far around the world. But one has to be a bit worries, especially with interest rates so low around the world it seems like there's a real possibility that things could get much worse, very fast." Greece knows all too well the pain a mounting debt pile can bring. But it may be reassuring for the country, if no one else, to know that it is not alone.