Global debt rose at an unprecedented pace in the first nine months of the year as governments and companies embarked on a “debt tsunami” in the face of the coronavirus crisis, according to new research.

The unprecedented pace of debt accumulation will leave the global economy struggling to reduce borrowing in the future without “significant adverse implications for economic activity”, the Institute of International Finance warned on Wednesday.

The total level of global indebtedness has increased by $15tn this year, leaving it on track to exceed $277tn in 2020, said the IIF, which represents financial institutions. It expects total debt to reach 365 per cent of global gross domestic product by the end of the year, surging from 320 per cent at the end of 2019.