Archive · 20 Aug 2026
Global Debt Nears 100% of GDP as Crisis Risks Rise
Governments around the world owe more money than ever before.
Their total debt could equal almost all the money produced by the global economy by 2029.
Countries borrowed heavily during the pandemic to support people and businesses.
Now interest rates and bond yields are higher, making it more expensive to repay and refinance that debt.
Older populations are also increasing healthcare and pension costs.
Wars, trade disruptions and weaker growth are adding more pressure.
This does not mean a worldwide debt crisis is certain, because countries can still improve growth and manage their budgets.
India is in a better position than some countries because it is trying to reduce its deficits, but it could still face pressure from global financial conditions.
The expert says stronger productivity-led growth is the most sustainable way to reduce the risks.
Global public debt is projected to approach 100% of global GDP by 2029, after reaching nearly 97% during the pandemic.
The United States, Japan and France are among the advanced economies facing especially high debt levels, while China is driving much of the increase among emerging economies.
Higher bond yields, slower growth, wider deficits and greater reliance on short-term borrowing are increasing debt-servicing and refinancing risks.
Political resistance, ageing populations, geopolitical conflicts and trade disruptions are making fiscal reforms and deficit reduction more difficult.
India is pursuing fiscal consolidation, but higher global yields, capital outflows, currency pressure and large interest payments could constrain public spending.
- Who
- Governments and central banks worldwide, with particular concern focused on advanced economies and emerging economies such as India and China; the assessment was provided by Annie Mahajan of CareEdge Global Ratings.
- What
- Global sovereign debt is rising toward 100% of global GDP, increasing borrowing, refinancing and public-spending pressures.
- When
- Debt surged during the pandemic, rose again after global monetary tightening, and is projected to reach nearly 100% of global GDP by 2029.
- Where
- The risks affect the global economy, with major implications for the United States, Japan, France, China, India and other economies.
- Why
- Higher interest rates, slower growth, wider deficits, ageing-related spending, geopolitical tensions, trade disruptions and increased short-term borrowing are pushing debt higher.
Debt Crisis Risks Are Intensifying
A Crisis Is Not Inevitable
Debt sustainability
Debt Crisis Risks Are Intensifying
Rising yields, slower growth, wider deficits and higher interest payments could make debt increasingly difficult to manage, especially in advanced economies.
A Crisis Is Not Inevitable
Some economies still have options to reduce risks, and the outcome depends on whether debt supports growth and how effectively institutions respond.
Fiscal adjustment
Debt Crisis Risks Are Intensifying
Ageing populations, social spending and climate-related requirements are reducing fiscal space, while political resistance makes pension and spending reforms difficult.
A Crisis Is Not Inevitable
Governments can gradually reduce deficits through stronger organic growth rather than relying mainly on austerity measures.
Impact on emerging economies
Debt Crisis Risks Are Intensifying
Higher advanced-economy yields could trigger capital outflows, currency pressure and weaker external demand in countries such as India.
A Crisis Is Not Inevitable
India’s domestic economic component provides some protection, and its fiscal-consolidation path could help its debt trajectory decline.
- Projected global debt
- Nearly 100% of global GDP by 2029.
- Pandemic debt peak
- Global debt reached nearly 97% of GDP during the pandemic.
- High-debt economies
- Japan and France have debt close to 250% of GDP; the United States is also above 100% of GDP.
- United States bond yields
- Long-term US yields are averaging close to 5%.
- Refinancing risk
- The United States, Germany and Japan have increasingly relied on short-term financing.
- India’s position
- India has elevated sovereign debt, but its debt trajectory is expected to decline as fiscal consolidation continues.
- Main proposed solution
- Revive productivity-led growth while gradually bringing deficits under control.