As worries rise over the outlook for global growth, excessive debt levels are drawing the eyes of nervous investors worried that more countries will struggle to shoulder their debts.

Adam Slater, lead economist for Oxford Economics, says the risks from the growing buildup of credit across the globe is worse than in previous years, with the dangers chiefly emanating from corporations that took advantage of low interest rates to borrow heavily.

“Overall, credit vulnerabilities look greater than when we last looked in 2017; the corporate credit channel in particular could worsen a global economic slowdown,” he said, in a Monday note.

The global economy has failed to keep up with the ramp-up in credit growth. The International Monetary Fund trimmed its global economic forecast for 2019 to 3.5% from its previous expectation of 3.7%, while it estimated the global expansion in 2018 had proceeded at a rate of 3.7% down from 3.9%.

Global growth concerns have taken a toll on financial markets, contributing to the U.S. stock market’s December slide. Stocks have bounced back sharply, with the S&P 500 SPX, -1.81%[1]  rising 13% from its Christmas Eve low through Friday. Worries about global growth were seen contributing to a weaker tone on Tuesday[2], however, with the S&P 500 down 1.1% and the Dow Jones Industrial Average DJIA, -1.69%[3]  declining around 250 points.

The one-two punch of a...

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