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, driven by a $7 trillion rise in global debt and slowing economic growth, according to an Institute of International Finance report. The world's debt stock hit a new year-end record of $318 trillion, with government debt levels of $95 trillion surpassing inflation and economic growth. This increase puts pressure on governments to balance their budgets, as "bond vigilantes" may punish them if fiscal deficits persist.
- The growing reliance on debt by governments raises questions about the long-term sustainability of public finances and the ability of policymakers to address the underlying drivers of debt accumulation.
- As global debt continues to rise, how will governments navigate the complex interplay between fiscal stimulus, economic growth, and the need for budget discipline in a rapidly changing economic landscape?