Global debt surged by almost $29tn to a record $348tn last year, according to an influential think-tank that expects the burden to worsen in the coming years as governments increase spending on areas such as defence.
The Institute of International Finance said on Wednesday that governments’ investments in national security were the primary driver behind last year’s $28.8tn rise, with spending on AI and similar technologies also contributing to what was the biggest annual increase in the global debt burden since the Covid-19 pandemic.
The IIF figures, which combine the debt burden for governments, companies and households, also showed that, as a share of global output, global debt ratios declined for a fifth consecutive year to around 308 per cent of GDP. The debt-to-GDP ratio is seen as a vital indicator of borrowers’ capacity to honour their obligations.