Global Debt Marches to Record High, Raising Risk of Bond Vigilantes, Iif Says
The global debt-to-GDP ratio rose for the first time since 2020 last year, as the world's debt stock hit a new year-end record of $318 trillion and economic growth slowed. The $7 trillion rise in global debt was less than half of the 2023 increase, when expectations of Federal Reserve interest rate cuts sparked a borrowing surge. Debt-to-GDP approached 328%, a 1.5 percentage point increase, as government debt levels clashed with slowing inflation and economic growth.
- This surge in global debt could have far-reaching implications for economic stability, particularly if bond vigilantes begin to punish governments with higher borrowing costs.
- What will be the consequences of high global debt on international relations and global governance in the years to come?