Global leverage has been rising as a share of GDP over the past decade causing growing concern among analysts, according to a new report from Moody's Analytics. Though global financial conditions remain largely accommodative, debt servicing costs will continue rising over the next year after an extended period of low borrowing costs, putting pressure on balance sheets, the authors note.

According to Moody's global nonfinancial corporate debt now amounts to nearly 100% of GDP. The rise has been fairly rapid over the past five years after the rate remained steady at around 85% of GDP between 2009 and 2014. Low interest rates around the globe have encouraged borrowing across developed economies and emerging markets. Indeed, since 2014 the corporate debt-to-GDP ratio in emerging markets has exceeded that of developed economies, and the spread has widened, although the ratio has risen within both groups of countries.

In the U.S., the corporate debt cycle had followed the early years of the business cycle, peaking in 2008 and then falling through 2011. But historically low interest  rates encouraged an uptick in lending as the economic recovery gained traction, so that corporate debt peaked at 73.6% of GDP in 2017, which held steady through the first quarter of 2018.

Read the report in it entirety here