Global debt is at record highs, with the U.S. alone holding over a third of all government debt. China and Japan follow as major borrowers, while European economies like the UK, France, and Italy carry heavy debt loads relative to GDP. The growing cost of servicing debt is becoming a critical challenge, especially for low-income countries.
The world owes over US$300 trillion in debt, a figure that is more than three times the world’s GDP. This staggering amount is a result of governments borrowing to finance their expenditures and revenues, primarily from taxes and other income sources. The debt is growing faster than the economy, with global public debt projected to exceed 100% of the world’s GDP by 2029. This trend poses significant risks to fiscal stability and economic growth
In mid-October, the International Monetary Fund (IMF) released the latest version of its World Economic Outlook, which revealed, among other things, that there has been a major slowdown in global growth. However, more importantly, it indicated that the gross public debt owed by the world has increased by US$8.3 trillion since 2024.
Most of this public debt is owed by the United States and China, with Washington’s debt burden standing at 35.4% of the global share and China’s standing at 16.8%. Together, the two countries hold 51.8% of the world’s government debt. The United States owes a staggering US$38.2 trillion, which is 125% of the US Gross Domestic Product (GDP). This is also known as the debt-to-GDP ratio, and it’s critical for understanding public debt.
