According to the latest OECD insights, global debt in 2025 is set to surpass $100 trillion. It is raising major concerns about sustainability, refinancing risks, and fiscal fragility across both advanced and emerging economies. While this figure may seem abstract, the implications are tangible—and growing more urgent.
As interest costs rise and repayment deadlines converge, governments and corporations worldwide are approaching a debt inflection point that could shape economic policy and market behavior for years to come.
Rising Interest Costs Now Exceed Defense Budgets
One of the most striking observations in the OECD report is how interest payments on public debt have soared, reaching 3.3% of GDP in just three years across the OECD bloc. These rising costs have now overtaken defense spending in many countries—highlighting how debt servicing is starting to displace other critical areas of national budgets.
This trend not only reflects the impact of higher interest rates but also signals that many governments may be operating with shrinking fiscal room just as they face rising needs in areas like energy transition, digital infrastructure, and healthcare.
Global Debt 2025–2027: A Wall of Maturities Ahead
The years ahead represent a stress test for sovereign and corporate borrowers alike. The OECD warns that:
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50% of OECD and major emerging market government debt will mature by 2027.
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Around one-third of global corporate bonds will also require refinancing within that same window.
This concentration of maturities means that debt issued at ultra-low rates in recent years must now be refinanced at much higher costs, significantly impacting balance sheets and future borrowing capacity.
OECD’s Caution: Debt Risk Undermining Investment
As borrowing becomes more expensive, the OECD highlights a growing dilemma:
“Higher costs and debt risk future borrowing capacity when investment needs are greater than ever.”
Emerging markets are particularly vulnerable, facing tighter financial conditions, weaker currencies, and reduced market access—right when infrastructure, climate adaptation, and innovation demand more funding than ever before.
A Glimmer of Resilience
Still, there are signs of resilience in current debt structures. The OECD notes that a large portion of existing debt still benefits from below-market interest rates, due to being issued during the previous low-rate cycle.
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Over 50% of OECD sovereign debt is still locked in at low costs.
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Around one-third of emerging market debt is similarly structured.
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Even in the corporate space, two-thirds of investment-grade bonds and three-quarters of high-yield debt are still servicing cheaper coupons.
However, these buffers are thinning fast—and the real impact will emerge as 2025 approaches and a new round of refinancing begins.
What It Means for Investors and Policymakers
For policymakers, the coming years demand a careful balance between debt sustainability and long-term investment. For investors, the shift may require a reassessment of risk in sovereign bonds, credit markets, and emerging economies.
The scale of global debt in 2025 will influence rate policy, market volatility, and capital flows worldwide. Those who anticipate the structural shifts early may be better positioned to navigate the next cycle.
Final Thoughts: Global Debt at a Crossroads
With over $100 trillion in government and corporate debt outstanding, and maturities accelerating, 2025 marks a pivotal moment. As interest burdens rise and economic uncertainty persists, the global economy faces a delicate balancing act between financial stability and growth investment.
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Investors who monitor the evolution of global debt in 2025 will be better prepared to assess risk, seize opportunity, and stay ahead of macroeconomic shifts.