IMF warns on debt bomb in China

The world goes blind to a new crisis as investors began to lose confidence in the ability of politicians to revive economic growth, writes British newspaper "The Telegraph", citing a report by the International Monetary Fund outlook for the global economy.
Warning of loss of policy inaction, the IMF stated that the financial and economic stagnation could worsen if governments do not prevent the formation of malignant feedback because of the fragile trust between weak growth, low inflation and rising indebtedness.
Jose Vinyals, head of financial stability at IMF warned that continued delays could erase 3.9 percent of global gross domestic product compared with current expectations for the next five years amid persistent turmoil in the markets.
According Vinyals bomb hidden in a $ 1.3 trillion risky corporate debt that is ticking in China, also carries potentially serious challenges to financial stability if banks are pushed to the edge.
The loss of investor confidence bodes bad outlook for global markets. If no action is taken, the shares in the UK, the US, Eurozone and China will lose a fifth of its value in the next two years.