"Global Debt Hits Record $313 Trillion, Straining Economies Worldwide"

"Global Debt Hits Record $313 Trillion, Straining Economies Worldwide"

Global debt has soared to a record high of $313 trillion, according to a report by the Institute of International Finance (IIF). This marks a significant increase from $210 trillion a decade ago. The rise in debt is attributed to several factors, including government budget deficits, increased defense spending due to regional conflicts, and post-pandemic interest rate hikes by central banks worldwide.
The United States, France, and Germany have seen the largest increases in debt. In the U.S., the national debt has reached $34.3 trillion, prompting discussions about raising the retirement age and increasing taxes. The higher interest rates are making it challenging for young people in advanced economies to buy homes.
The Federal Reserve recently kept its benchmark interest rate steady but indicated that rate cuts could be possible if inflation eases. However, the longer rates remain high, the more difficult it will be for developing economies to repay their debts. Countries in Sub-Saharan Africa, for example, already spend a significant portion of their GDP on interest payments, which limits their ability to invest in education, health care, and infrastructure.
Geopolitical tensions and trade protectionism are additional risks highlighted in the report, which could further exacerbate debt vulnerabilities.