Speaking about the risk of global debt — the total debt level for the world came in at a record $164 trillion in 2016, according to the IMF — Zhang noted he’s seeing levels “higher than the levels seen” during the 2008 financial crisis.
“That, by itself, is alarming to all of us,” he said.
Countries have to be aware of their fiscal conditions, particularly in the public sector, to ascertain sustainability or determine if fiscal expansion remains a viable option to support economic growth, Zhang said.
As some economies approach full employment, further government expenditure could wind up imposing risks to the sustainability of their fiscal health, he warned.
Finally, on the topic of innovation, Zhang said there is “great” potential for financial technology to bring efficiency gains and wider coverage of financial services for the masses.
The caveat with technology, however, remains the risk of cybercrime proliferating, Zhang said, and that will require “very close attention,” with the IMF working together with countries and concerned industries to find solutions to the problem.
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