The IMF has issued a debt warning for countries including Australia.
The IMF has issued a debt warning for countries including Australia.

IMF: World debt now at $A199,000,000,000,000

AUSTRALIA'S love affair with private debt has been singled out in a new report from the International Monetary Fund which shows debt levels now at a staggering $199 trillion dollars globally.

For those who need to consider that in numbers:

1,000 = one thousand
1,000,000 = one million
1,000,000,000 = one billion
1,000,000,000,000 = one trillion

The IMF puts global public and private debt levels at $US152 trillion ($199 trillion), putting some advanced economies now at greater risk in the event of another crisis similar to that seen in 2008.

"Private debt has continued to accumulate at a fast pace, notably Australia, Canada and Singapore," the IMF warns in its latest Fiscal Monitor.

The IMF says although private debt is starting to "retrench", public debt has increased by 25 per cent of GDP from 2008 to 2015.



The IMF's head of fiscal affairs Vitor Gaspar is concerned that excessive private debt - or a debt overhang - leaves the world exposed.

"At $US152 trillion, global debt is at record highs and constitutes one of the most important headwinds against growth in the global economy," Mr Gaspar said.

"When there's a build-up of private debt, the likelihood of a financial crisis is higher and financial recessions are more costly and prolonged than normal recessions."

The IMF has also sounded a warning about debt in China.

China's high corporate debt levels could end in a disorderly deleveraging of debt, it said.

"If the corporate debt problem in China is left unaddressed it will have significant consequences in China and increases the risks of a hard landing," said Mr Gaspar.

The IMF has suggested that government guarantees and tax incentives like negative gearing, especially those introduced to firewall banks during the global financial crisis, should be reviewed.