The Australian mortgage-debt boom that helped us stave off the worst effects of the global financial crisis may have only prolonged the inevitable, according to the world’s top monetary watchdog.

The Bank for International Settlements, a Swiss-based think tank for central bankers, made the warning in its 87th annual report, published on Monday.

The report found that household debt and property prices have continued to rise in tandem in Australia and other countries that were “less affected by the GFC”, whereas debt ratios declined in harder-hit economies like the US and UK.

The BIS awarded Australia the dubious honour, along with Canada, Sweden and Switzerland, of a 2-3 per cent growth rate in household debt in 2016. Most of this money was used to outbid rival property buyers.

With household debt growing almost 12 per cent since the GFC in 2008, Australia had become vulnerable to a US-style, debt-sparked crisis.

While this surge in indebtedness helped Australia dodge the worst of the financial crisis, the BIS predicted that it was a risk to future growth and put us at peril of another crisis – one that we struggle to avoid.

“Excessive indebtedness has been one of the root causes of financial crises and the ensuing deep recessions,” the report said.

“Household debt – or debt more generally – outpacing GDP growth over prolonged periods is a robust early warning indicator of financial stress.

“Furthermore, there is growing evidence that household indebtedness affects not only the depth of recessions but growth more generally.”

The BIS ranked Canada, Hong Kong and China as most vulnerable to a US-style, debt-sparked crisis, with Australia on a lower rung of risk.

But even if we avoid such a disaster, the BIS noted that an increase in household debt only boosts consumption and GDP growth in the short term, before dragging on consumption for many years afterwards.

This is particularly concerning for Australia because household consumption accounted for more than half (57 per cent) of our GDP in the March quarter.

The BIS’s rough estimate was that a 1 percentage point increase in a nation’s household debt-to-GDP ratio would end up constraining GDP growth by 0.1 percentage point.

Australia’s household debt was about 50 per cent of GDP in 1990. By 2008, just before the global financial crisis, it was just under 110 per cent. As of January 2017, it was at 123 per cent, according to the BIS.

If the think tank’s estimate is correct, that 13 percentage point increase in indebtedness could constrain Australia’s GDP growth by 1.3 percentage points over the long term – a sizeable impact.

Australians are also among the world’s most vulnerable borrowers to interest-rate hikes because of our extraordinary levels of household debt.

While the report will spark new debate, the risks were well known, even by those responsible for fuelling the debt bubble.

RBA governor Philip Lowe acknowledged it when he gave evidence to Parliament earlier this year: “The balance that is required is to support spending in the economy today while avoiding creating fragilities in household balance sheets that could cause problems for the economy later on.”

Dr Lowe’s predecessor and mentor, Glenn Stevens, was also mindful of the risks. He warned in 2012 that using ultra-low rates to clean up after the GFC could bring “its own toxic consequences” of booming property prices and dangerous levels of debt.

In good news, the BIS’s global outlook was more optimistic than last year’s report. This is important for Australia, an open economy that relies heavily on global growth.

However, the risk that mainland China could fall victim to the same kind of debt implosion that crippled the US, was according to the BIS, one of its main concerns.

Australia would not be able to avoid the shock waves.