Insignia Consultants | Global debt exceeds $100 trillion as interest costs surge, OECD says
Global debt exceeds $100 trillion as interest costs surge, OECD says
LONDON, March 20 (Reuters) - Outstanding government and corporate bonds globally exceeded $100 trillion last year, the OECD said on Thursday, with rising interest costs leaving borrowers facing tough choices and needing to prioritise productive investments.
Between 2021 and 2024, interest costs as a share of output rose from the lowest to the highest in the last 20 years. Spending by governments on interest payments reached 3.3% of GDP in its member countries, higher than what they spend on defence, the Organisation for Economic Co-operation and Development said in a global debt report.
While central banks are cutting interest rates now, borrowing costs remain much higher than before 2022's rate hikes, so low-rate debt is continuing to be replaced and interest costs are likely to continue rising ahead.
That comes at a time when governments face big spending bills. Germany's parliament approved a massive plan to boost infrastructure and support a broader European defence spending push this week. Long-standing costs from the green transition to ageing populations loom for major economies.
