Soaring global debt interest costs outstrip defence spending

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According to the OECD statistics, the largest part of the Rich Nations’s economic output from at least 20 2007 has been swallowing interest payments and surpassing their expenses in housing.

DEBT O SERVICE SERVICE AS GDP PEOPLE FOR 38 OECD The group’s World Debt report on Thursday said the countries stood at 8.5 percent in 2021, which increased from 2.5 percent in 2021. In contrast, the World Bank assumes that the same group spent 2.4 percent of GDP on their military in 2023.

The cost of interest was 5.7 percent of GDP in the United States, 2.5 percent in the UK and 5 percent in Germany.

Bond investors have increased the cost of adopting Orrows in recent months as bond investors for continuous inflation in large economies Emerge Since many governments extend the expenditure on defense and other financial stimuli policies.

The OECD warned that if the need for investment is higher than ever, the growing yield and growing B is higher than ever, then it limit the limitation to the orrow of the future at that time. It highlights a “difficult outlook” for global debt markets.

Sovereign orrow According to the OCD report, the high-income countries are expected to reach the new record of $ 1 TN in 2021, compared to $ 16TN in 2021 and 14TN in 2023. This wave of Debt has encouraged concerns over stability in countries like the United Kingdom, France and even the United States.

Carmin de Noah, director of the OCD of Financial and Enterprise Affairs, says the burden of the big debt is “not negative” itself.

However, in the last 20 years, many Orrows were spent on the financial crisis of 20 and recovery from the Covid -1 epidemic, he added, “now need to be transferred from recovery” to infrastructure and climate projects.

“Adoption of orrow must increase the growth” so that the governments can finally “stabilize and actually decrease the debt-to-GDP ratio”, D. Noa says.

However the image is complicated High bond yieldWhich makes the existing debt re -finance more expensive.

The report states that by 20227, about 5 percent of the OECD sovereign Debt will mature.

The OCD says the modified profile of the sovereign bond holders added to the terms of expensive Debt. With the opening of the emergency bond-oriented programs, the central bank holdings of the Government Bonds are expected to decrease by $ 3TN from their peak of 2021 and will be reduced by 1TN this year.

This means that private investors – whom D Noa said “more prices are sensitive” – ​​will make the difference. The sensitivity opens the issues to the issue of further instability and keeps them in contact with the “higher geopolitical and collective economic uncertainty”.