The global debt ballooned to a record high of more than $250 trillion and shows no sign of slowing down, according to a new report from the Institute of International Finance (IIF), which warned that this massive debt could impact international efforts to mitigate climate change.
Worldwide debt surged by $7.5 trillion in the first half of 2019, urging researchers to predict that the global debt would exceed $255 trillion by the end of the year.
"Extended low interest rates and easy money has facilitated the accumulation of a bone crushing amount of debt over the last decade or so," Dylan Riddle, a spokesperson for the IIF told ABC News in a statement. "This debt has helped fuel global growth, however, we must focus on managing the current debt load, and deploying resources for more productive means -- like fighting climate change or investing in growth."
The bulk of the global debt -- or more than 60% -- is from the U.S. and China, the report released on Thursday found. Meanwhile, emerging markets debt also hit a new record high of $71.4 trillion.
The biggest increase in global debt over the past decade has been driven by governments and the non-financial corporate sector, according to the report.
At the end of their report, the economists warned that "high debt burdens could curb efforts to tackle climate risk."
"Global climate finance flows remain far short of what’s needed for an effective transition to a low-carbon economy," the IIF reported.
Citing the United Nation's Intergovernmental Panel on Climate Change's estimation in 2010 that an average of $3.5 trillion is needed annually to prevent global temperatures from increasing 1.5 degrees Celsius by 2050, the report said that "public and private finance flows will have to be scaled up rapidly."
"This is a growing source of concern for high-debt countries that also have high exposure to climate risk," the report added, listing Japan, Singapore, Korea "and even the U.S."
Hidden debt and other "poorly understood contingent liabilities" can create additional uncertainty, the report said, "and could leave some sovereigns struggling to source international and domestic capital -- including to combat climate change."