Global Debt Reaches $337 Trillion in 2026 as High Interest Rates Create Pressure
Global debt rising to $337 trillion in the first half of 2026 and increasing real interest rates are putting pressure on public finances.
Global debt rose to $337 trillion in the first half of 2026, reaching 311 percent of GDP, while high interest rates make public finances more difficult.
Increase in Global Debt
While global debt rose to $337 trillion in the first half of 2026, the debt-to-GDP ratio reached the 311 percent level. The decline in inflation and persistence of high interest rates increased the cost of carrying debt.
With real interest rates returning to positive territory, a debt stock of the same size began to create much more pressure on public finances compared to the low-interest era.
US Short-Term Borrowing
In the US, as of August, the share of short-term bonds in total public bond issuances over the past 12 months exceeded 80 percent. According to IIF and Bloomberg data, the US became the economy that placed the greatest weight on short-term borrowing.
Japan and Canada followed the US, while the share of short-term bonds in total issuances ranged between 30 and 35 percent in Germany, Italy, and China.
Divergence Between Corporations and the Treasury
While the average maturity of bonds issued by artificial intelligence-linked US companies in 2026 reached 13.4 years, this period dropped to 2.5 years for US Treasury bonds. Corporations are locking in their financing costs for the long term.
While corporations issuing long-term bonds lock in their financing costs, the Treasury, borrowing on a short-term basis, is more frequently exposed to changes in market interest rates.
Growing Interest Bill
The ratio of net interest expenditures on public debt to GDP, which was around 2 percent in the early 2020s, has recorded a rapid rise in recent years.
While IMF projections indicate that this ratio could rise above 4 percent by 2030, levels of 2.5 percent in emerging markets and 2.3 percent in the Eurozone are projected.
Corporate Maturity Extension Move
US companies financing artificial intelligence investments secure long-term funding from the bond market while making higher coupon payments than the Treasury.
While financing high capital expenditures, corporations carry refinancing risk to future dates and secure funding with maturities exceeding an average of 13 years.
Bond Issuances of Developing Countries
Despite high real interest rates, issuances by developing economies in international bond markets continue without slowing down.
According to IIF data, foreign currency-denominated bond issuances by developing country governments reached $190 billion in the first eight months of 2026.