Stories
Global Debt Hits Record $365 Trillion: Is the World Borrowing to Pay Old Debts?
C
CNBC Awaaz•24-09-2026, 14:53
Global Debt Hits Record $365 Trillion: Is the World Borrowing to Pay Old Debts?
- •Global debt surged by $10 trillion in six months to reach over $365 trillion, equivalent to –35,040 lakh crore, raising concerns about sustainability.
- •Governments are borrowing heavily due to budget deficits, rising expenses like energy relief, healthcare, pensions, defense, and infrastructure, coupled with slow economic growth.
- •A major concern is the increasing cost of servicing this debt, with bond yields reaching decade-highs as investors demand higher returns due to large deficits and economic uncertainties.
- •Developed countries paid over $3.3 trillion in interest on government bonds last year, an amount exceeding global spending on AI, defense, and clean energy.
- •The escalating debt and interest payments could force governments to cut new projects, re-prioritize spending, or increase taxes, impacting citizens and potentially prolonging the debt cycle, especially with election-driven decisions.
Key Questions Answered
According to research by the Institute of International Finance (IIF), the world's total debt increased by $10 trillion in the first six months of 2026, surpassing $365 trillion.
Governments are borrowing heavily due to budget deficits caused by pressures to provide relief from expensive energy, rising healthcare and pension costs for an aging population, and the need for defense and infrastructure funding amid weak economic growth.
General increases in bond yields mean investors demand higher returns for lending, forcing governments to pay more when refinancing existing debt or issuing new bonds and pushing up debt servicing costs.
