Global debt reaches $100 trillion after interest rate hikes in 2024
Between 2021 and 2024, interest costs as a percentage of output went from the lowest to the highest in 20 years.
A man who got his green card working at the New York Stock Exchange.
Global debt surpassed $100 trillion due to high interest rates from 2021 and especially in 2024. According to the Organization for Economic Cooperation and Development (OECD), this increase in interest costs forces borrowers to make difficult choices and to prioritize productive investments.
The financial institution's report comes after the Federal Reserve announced Wednesday that its interest rates would remain between 4.25% and 4.5%, to the relief of the U.S. stock market.
Between 2021 and 2024, interest costs as a percentage of output rose from the lowest to the highest in 20 years. Government spending on interest payments reached 3.3% of GDP in its member countries, above what they spend on defense, the OECD noted.
With these data, the current world debt level exceeds the last historic peak reached in 2007 for the first time.
The OECD warned that the double whammy of rising yields and rising debt could end up "restricting capacity for future borrowing at a time when investment needs are greater than ever." It also underscored the challenging outlook for global debt markets.
Relationship between interest payments and GDP.
U.K. 3.2% 2.9%
Japan 1.2% 1.3%
Germany 0.9% 1.0%
France 1.9% 2.1%
U.S. 4.4% 4.7%
Italy 3.7% 4.1%.
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