The World Bank’s concerns that countries could be borrowing excessively stem from the recent history of financial distress, with each crash preceded by an accumulation of debt.The build-up since 2010 concentrated in emerging and developing countries rather than in advanced nations.

In about 80% of emerging and developing economies total debt higher in 2018 than in 2010 and the World Bank said they had been “navigating dangerous waters” because the current wave of borrowing had coincided with a decade of repeated growth disappointments.

Heavily indebted countries were now confronted by weaker growth prospects in a fragile global economy.

The GEP said debt rising among emerging countries, in contrast with previous episodes – such as the 1980s Latin American debt crisis – when the debt build-up was region specific.

More than a third of emerging and developing economies had experienced an increase in debt of at least 20 percentage points of GDP.

In addition, debt accumulation in both the public and private sectors, which contrasted with past waves when the build-up either by the government or private firms.

The World Bank said countries should seek to reduce the likelihood of crises and lessen their impact should they materialize.

Through building resilient monetary and fiscal frameworks, instituting robust supervisory and regulatory regimes, and following transparent debt management practices.

“However, high debt carries significant risks for emerging and developing economies, as it makes them more vulnerable to external shocks.

The rollover of existing debt can become increasingly difficult during periods of financial stress, potentially leading to a crisis,” it said.