And if the wave breaks, it could be more damaging since it would engulf private companies in addition to governments, at a time when economic growth is sluggish, according to a new report that covers four debt surges from 1970-2018. "The size, speed and breadth of the latest debt wave should concern us all," World Bank President David Malpass said in a statement.
"Clearly, it's time for course corrections," he added.
The World Bank and International Monetary Fund have been sounding the warning about growing global debt for years, but the latest report is even more stark and turned up the volume on its calls for governments to take steps to prevent a debt crisis.
IMF chief Kristalina Georgieva on Thursday said developing nations in Africa especially need to strike the right balance between financing development and a manageable debt level.
The IMF reported that total global debt rose to $188 trillion at the end of 2018, equivalent to nearly 230 percent of the world's economy.
The World Bank report highlights the "striking" debt surge in emerging and developing economies, which is the "largest, fastest and most broad-based in EMDEs in the past 50 years."
After declining during the 2008 global financial crisis, amid very low borrowing costs in just eight years since 2010, debt in these countries climbed to an all-time high of roughly 170 per cent of GDP or about $55 trillion.
Much of the growth was incurred by China (equivalent to more than $20 trillion), but Beijing also has become a large lender for low-income countries.
The report warns that the current debt wave "could follow the historical pattern and culminate in financial crises in these economies," especially if interest rates spike or if there is a sudden global shock.
Better debt management, improved tax collection, flexible exchange rates and tighter fiscal rules to manage spending could help avert a crisis and soften the blow if one occurs, the World Bank said.
"Towering though it may seem, the latest global wave of debt can be managed," Malpass said.
"But leaders need to recognize the danger and move countries into safer territory in terms of the quality and quantity of investment and debt -- sooner rather than later." His IMF counterpart, Georgieva, in a blog post Thursday repeated her concern about the massive increase in commercial borrowing in Africa -- accounting for 70 per cent of the ballooning of debt.