Global Debt Hits $100 Trillion: A Ticking Time Bomb for Economies

  • The Organisation for Economic Co-operation and Development (OECD) reports that global government and corporate bonds have surpassed $100 trillion, marking a significant financial milestone.

  • Interest payments on debt have surged, now constituting 3.3% of GDP in OECD countries, surpassing defense spending for the first time.

  • From 2021 to 2024, the share of interest costs relative to economic output has skyrocketed, compelling governments and corporations to make tough financial choices.

  • Despite central banks easing interest rates, borrowing costs remain elevated compared to pre-2022 levels, leading to a shift from low-rate debt to more expensive financing.

  • Major economies face mounting pressures from demographic changes and the transition to greener energy, with Germany recently approving a substantial investment plan for infrastructure and defense.

  • The OECD warns that nearly half of government debt in OECD countries will mature by 2027, increasing refinancing risks, particularly for low-income nations where over 20% of debt is due this year.

  • The report emphasizes that strategic investments are crucial for sustainable growth; otherwise, economies may face deeper financial instability.

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