Jan. 9 (UPI) -- The global economy should slowly grow in 2020, but the possibility of a downward slide persists as a buildup of worldwide debt buildup increases at the fastest rate in 50 years, the World Bank said in an analysis.
In its "2020 Global Economic Prospects," released late Wednesday, the World Bank projects global economic growth at 2.5 percent this year. The 334-page study predicts advanced economies to grow a nominal 1.4 percent, due to weakness in manufacturing -- while emerging and developing nations are projected to expand more than 4 percent.
In its assessment, the World Bank warned that any growth could be offset by the current accumulation of global debt, which began in 2010. History, it said, has shown that similar periods of debt in recent decades culminated in some type of economic crisis.
"There have been four waves of debt accumulation in the last 50 years. The latest wave, which started in 2010, has seen the largest, fastest, and most broad-based increase in debt among the four," the bank said in a statement accompanying the report.
"While current low levels of interest rates mitigate some of the risks associated with high debt, previous waves of broad-based debt accumulation ended with widespread financial crises."
World Bank Prospects Group Director Ayhan Kose said world leaders should pay attention to the possibility of another looming crisis, if the outcomes of the past three debt waves are any indications.
"Low global interest rates provide only a precarious protection against financial crises," Kose said. "The history of past waves of debt accumulation shows that these waves tend to have unhappy endings. In a fragile global environment, policy improvements are critical to minimize the risks associated with the current debt wave."
Thursday's report said global debt hit 230 percent of the global gross domestic product in 2018, with China responsible for most of that accumulation. The 2018 figure marked a 54 percent increase of GDP since the current debt wave began in 2010.
The analysis offered some recommendations to avoid or mitigate a global economic slide in 2020.
"Policy options to reduce the likelihood of crises and lessen their impact should they materialize include building resilient monetary and fiscal frameworks, instituting robust supervisory and regulatory regimes, and following transparent debt management practices," the World Bank report states.