Developing countries are facing a surge of debt in the tens of trillions of dollars, heightening the risk of financial crises that weaken per capita income and investment in poor countries, according to a World Bank Group study.

In 2018, total debt in emerging and developing economies reached $55 trillion, capping an eight-year surge in government and private borrowing that the World Bank called "the largest, fastest, and most broad-based in nearly five decades."

The average debt-to-GDP ratio among developing countries stands at to 168%, up 54 percentage points since 2010, when the latest debt surge began forming. The study, released Dec. 19, noted that this pace of debt accumulation was almost three times faster than during the Latin American debt crisis in the 1970s.

While the report indicated that historically low global interest rates have mitigated the risk of a worldwide debt crisis, the record of the past 50 years shows a correlation between rapid debt growth and financial crises. Since 1970, about 50% of 521 recorded cases of rapid debt growth in developing countries have been coupled with financial crises that lowered per capita income and investment levels.

"Policymakers should act promptly to enhance debt sustainability and reduce exposure to economic shocks," said Ceyla Pazarbasioglu, World Bank Group vice president for equitable growth, finance and institutions.

The report studied four major "waves" of debt in more than 100 countries since 1970 and found that the latest wave was different from the previous ones due to the simultaneous buildup of both public and private debt, the involvement of new types of creditors, and the occurrence of the debt buildup outside one or two limited regions.

The World Bank said the characteristics of the latest debt wave pose new challenges for policymakers, who now have to deal with nonresident investors holding significant amounts of government debt in emerging and developing economies under terms that do not provide for concessions and debt relief.

World Bank Group President David Malpass said the size, speed and breadth of the latest debt wave should be a concern for governments around the world.

"It underscores why debt management and transparency need to be top priorities for policymakers — so they can increase growth and investment and ensure that the debt they take on contributes to better development outcomes for the people," Malpass said.