Reserve Bank of India chief cautions on $315 trillion global debt on emerging economies
- 13 Sep 2024
Reserve Bank of India Governor Shaktikanta Das cautioned the world on the rising global debt, which has surged to a staggering $315 trillion, equivalent to 333 per cent of global Gross Domestic Product in 2024, Asian News International (ANI) reported on Friday.
During a speech at the 'Future of Finance Forum 2024' on Friday in Singapore, the governor highlighted that this unprecedented level of debt poses significant risks, particularly for emerging market economies (EMEs) and low- to middle-income countries, which are increasingly vulnerable to financial instability.
He said that the current fiscal landscape is further complicated by rising fiscal deficits, which are now higher than pre-pandemic levels. Das highlighted that with 88 economies entering election cycles in 2024, the scope for fiscal consolidation appears limited, making it crucial for countries to manage their debt effectively to avoid exacerbating financial risks.
The RBI Governor also pointed out that the ongoing geopolitical tensions and supply chain disruptions have increased risk aversion among investors, leading to increased cross-border trade restrictions.
According to governor this environment of uncertainty requires prudent monetary policy management by central banks and proactive supply-side measures by governments to mitigate potential fallout.
WAM
