Global government borrowing to reach a record $12.3 trillion - FT
Kyiv • UNN
Global government borrowing will increase by 3% to $12.3 trillion due to rising defense spending and high interest rates. Total debt will reach $76.9 trillion, which will account for 70.2% of global GDP.

Global government borrowing is expected to reach a record $12.3 trillion this year, as rising defense and other expenditures in the largest economies and higher interest rates collectively push the debt level upward, reports the Financial Times, writes UNN.
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A 3% increase in the issuance of government bonds in 138 countries will lead to an increase in the total debt volume - which has been exacerbated by the global financial crisis, the COVID-19 pandemic, and now the need to increase defense spending in Europe - to a record $76.9 trillion, according to estimates from S&P Global Ratings.
Major economies are focused on fiscal policy to "weather the crisis while the crisis continues, and as a result, you really have a sovereign picture with much higher debt," said Roberto Sifon-Arevallo, global head of sovereign borrowing at S&P.
He added that this has been intensified by the rising costs of debt servicing.
Borrowing to finance higher expenditures "was acceptable and sustainable as long as you had borrowing costs that were pre-pandemic, now it is a much bigger problem," Sifon-Arevallo said.
Deteriorating public finances are raising concerns among major investors, with bond giant Pimco warning in December that it plans to reduce its commitment to long-term U.S. debt due in part to "debt sustainability issues." Billionaire investor Ray Dalio warned that the United Kingdom risks entering a "debt death spiral" as it has to borrow more and more during a self-fulfilling bond sell-off.
In the U.S., the world's largest borrower, "widespread budget deficits, high interest costs, and significant refinancing demands" will lead to an increase in long-term issuance to $4.9 trillion, S&P stated, whose data does not include short-term Treasury bills and other forms of government borrowing.
The agency expects the U.S. government's budget deficit to remain above 6 percent of GDP until 2026, but it claims that the dollar's status as the world's de facto reserve currency will continue to provide the U.S. with "significant flexibility" in public finances.
China, the world's second-largest borrower, is expected to increase its long-term issuance by the equivalent of over $370 billion to $2.1 trillion as it spends heavily to revive its domestic economy. Outside of the G7 countries and China, borrowing in the rest of the world is expected to remain generally at previous levels.
Overall, according to S&P, the debt volume will reach 70.2% of global GDP. This figure has been steadily rising since 2022, but is below the 73.8% reached in 2020 when governments responded to the pandemic with massive spending programs.
S&P also highlighted a significant deterioration in credit quality after the global financial crisis for several major economies. The share of debt coming from borrowers with the highest AAA rating has decreased, as countries like the U.S. and the United Kingdom have fallen out of this group.
The recent increase in government debt supply, combined with investor concerns about economic prospects, has led to "sharper yields and a resurgence of investor fears regarding weak fiscal positions in many developed economies," S&P stated.
Sifon-Arevallo said that investors have an appetite for debt issuance as bond fund assets under management have increased. But the rising cost of servicing the growing debt burden will hit other government ambitions, such as infrastructure spending, he added. This has contributed to "changes in political tones" around the world.
"The rise of more fiscally conservative [political] movements is related to the fact that you have seen this huge increase in budget deficits and debt," he said.