The global economic growth is further challenged by the world’s debt, which according to the International Monetary Fund (IMF) has now reached a record $152tn. 
This, the IMF recently noted, represents 225% of global GDP and adds to risks that the global economic recovery could turn into stagnation or even recession.
“Two thirds of this debt is private,” IMF points out and stresses that high and rapidly increasing private debt often leads to financial crisis. Financial recessions are longer and deeper than normal recessions. 
“The sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery,” the Washington DC-based Fund cautions.
This debt burden is mounting at a time when slow growth means inflation and interest rates will remain low, making it hard for companies, individuals and governments to earn their way out of debt.
A combination of low growth, high debt and weak banks could push the world in a dangerous financial and political direction, the IMF warned.
According to the Fund, the debt distribution worldwide was very uneven. It is mainly concentrated in advanced and a few systemically important emerging market economies. 
Debt levels are generally lower in low income countries. In some emerging markets, easy financial conditions have led to accumulation of private debt; a case in point is China. China is so large and the debt of non financial corporations is growing so fast that it significantly affects global debt trends. IMF sees targeted fiscal intervention as a means to contain global debt. They can be effective facilitating adjustment, but they should be well designed and pursued only if fiscal resources needed do not pose risks to fiscal sustainability or market access. 
Global debt is at record highs and rising, the global debt landscape is very diverse, reminding us that no one size fits all. Fiscal policy can do more, as the case may be, to restore nominal growth, facilitate adjustment, and build resilience. 
Meanwhile, IMF in its October 2016 World Economic Outlook said the global economic growth will remain subdued this year following a slowdown in the United States and Britain’s vote to leave the European Union.
The world economy will expand 3.1% this year, the IMF said, unchanged from its July projection. Next year, growth will increase slightly to 3.4% on the back of recoveries in major emerging market nations.
“Taken as a whole, the world economy has moved sideways,” said IMF chief economist and economic counsellor, Maurice Obstfeld. 
“We have slightly marked down 2016 growth prospects for advanced economies while marking up those in the rest of the world,” he said.
The report highlighted the precarious nature of the recovery eight years after the global financial crisis. It raises the threat that persistent stagnation, particularly in advanced economies, could further fuel populist calls for restrictions on trade and immigration. 
Obviously, such restrictions would hamper global productivity, growth, and innovation.