Governments and companies worldwide borrowed a staggering $25 trillion from markets in 2024, marking a $10 trillion increase from pre-pandemic levels and tripling the amount borrowed in 2007, according to the OECD’s Global Debt Report 2025. The report, released Thursday, warned that debt levels are set to rise further, with the central government debt-to-GDP ratio in OECD countries projected to reach 85% in 2025—nearly double the 2007 figure.
Despite falling policy rates, rising bond yields and growing sovereign and corporate indebtedness have pushed borrowing costs higher, potentially limiting future investment. OECD Secretary-General Mathias Cormann emphasized the need for efficient public spending and productive investments. Sovereign bond issuance in OECD countries is expected to hit $17 trillion in 2025, up from $14 trillion in 2023, while global corporate debt reached $35 trillion by the end of 2024, largely used for refinancing rather than productive investments.
Emerging markets saw a 12% increase in sovereign debt issuance, with China accounting for 45% of the total. Rising borrowing costs have already impacted government budgets, with interest payments averaging 3.3% of GDP in two-thirds of OECD nations—surpassing defense spending. Nearly 45% of sovereign debt and a third of corporate debt are set to mature by 2027, heightening refinancing risks. The withdrawal of central banks from sovereign debt markets has increased reliance on private and foreign investors, raising concerns over market volatility.
