Global debt surpasses 100 percent of GDP

The global economy faces a major challenge as government debt approaches exceeding the size of the Gross Domestic Product (GDP). The International Monetary Fund (IMF) expects public debt to surpass 100% of GDP before 2030, a level not seen since World War II. This issue is compounded by rising energy prices and the expansion of funding for artificial intelligence projects, which has led to higher bond yields despite a slowdown in economic growth. Additionally, increased issuance of government bonds and higher yields have raised borrowing costs, widening the fiscal deficit and threatening debt sustainability. The rising interest payments on debt further increase the debt servicing burden, turning financing into a growing developmental challenge. This pressure strains budgets and impacts expenditure on health, education, and infrastructure, with the risks concentrated in emerging economies that have significant financing needs.

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