The Napoleonic Wars were the last time we witnessed such a significant debt, according to WEF president.

• The president of the World Economic Forum, Borge Brende, presented a grim forecast for the world economy.
• He advised governments to carefully consider reducing their debt and implementing appropriate fiscal measures to avoid triggering a recession.
• He pointed out persistent inflationary pressures and suggested that generative artificial intelligence could be an opportunity for the developing world.

If the right economic measures are not implemented, the global economy will experience a decade of low growth, according to Borge Brende, president of the World Economic Forum.

At the "Special Meeting on Global Collaboration, Growth and Energy for Development" in Saudi Arabia on Sunday, he cautioned that global debt ratios are approaching levels last seen in the 1820s and there is a risk of stagflation for advanced economies.

The global growth estimate for this year is approximately 3.2%. Although it's not terrible, it's not what we're accustomed to - historically, the trend growth rate was 4% for many decades. According to him, there is a possibility of a slowdown similar to the one experienced in the 1970s in some major economies.

He stated that we cannot engage in a trade war while still needing to trade with one another in order to avoid a period of low growth when asked about the subject.

The global value chains will shift, with more near-shoring and friend-shoring, but we must not lose sight of the bigger picture. We must address the global debt crisis, which has reached levels not seen since the Napoleonic Wars, with the global GDP nearing 100% in debt.

He emphasized the need for governments to balance reducing debt with taking appropriate fiscal measures to avoid triggering a recession, while acknowledging the persistent inflationary pressures and the potential benefits of generative artificial intelligence for the developing world.

The IMF's recent report on global public debt, which showed that it had increased to 93% of GDP last year, aligns with his warning. Additionally, the IMF forecasts that global public debt could reach 100% of GDP by the end of the decade.

The Fund pointed out the high debt levels in China and the US, stating that the loose fiscal policy in the US increases pressure on interest rates, which then raises funding costs globally, exacerbating existing vulnerabilities.

The International Monetary Fund slightly increased its global growth forecast for 2024, from 3.1% to 3.2%, due to the world economy's surprising resilience in the face of inflationary pressures and monetary policy shifts.

The biggest risk for the global economy, according to WEF's Brende on Sunday, is the geopolitical recession resulting from the tensions between Iran and Israel.

The conflict between Israel and Iran could have led to an oil price of $150 overnight, which would have been detrimental to the global economy, as stated by him.