The world is facing a crisis as governments, households and financial institutions run into debt, a habit that S\u0026P Global Ratings warns could push total leverage up to 366% of global gross domestic product by 2030, reports.

This would mean a sharp increase in global debt to $300 trillion - or 349% of global GDP as of June 2022, as leverage grows slightly faster in advanced economies than in emerging economies, Terry Chan and.

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“Demand for debt—for example, to help consumers fight inflation, mitigate climate change, and rebuild infrastructure—will continue,” the experts write.. “To reduce the risk of a financial crisis, a trade-off between spending and saving may be necessary.”.

Rising interest rates over the past year as the U.S. Federal Reserve and the European Central Bank fight inflation have added to the debt burden.

Assuming about 35% of the world's debt has a monetary policy-sensitive floating rate, last year's bank rate cycle increased debt servicing costs by another $3 trillion, according to S\u0026P..

“There is no easy way to reduce global leverage,” wrote Chan and Dimitrievich..

Unfortunately, the experts did not indicate in their note what the complex options are..

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S\u0026P Global Ratings is part of the S\u0026P Global (NYSE: SPGI) group, a leading international company providing credit ratings, benchmarks, research and business solutions to organizations in the global financial, commodity and automotive industries.