Global Debt Hits Record High, IMF Expresses Concerns

Global debt has surged to a record high of $315 trillion, marking a significant increase in the debt-to-output ratio, which now stands at 333 percent after a period of decline. Emerging markets have witnessed a doubling of debt to over $105 trillion in the past decade, with countries like China, India, and Mexico leading the way in debt accumulation.

Government deficits are projected to further inflate global debt by $5.3 trillion this year, while escalating trade tensions and geopolitical uncertainties loom as potential threats to debt markets. Notably, the US and Japan have experienced rapid debt growth among developed economies, with the US expected to allocate more than 10 percent of its revenue towards debt servicing by 2026, raising concerns about its long-term fiscal sustainability.

On the other hand, Japan is forecasted to spend less than 2 percent of government revenue on debt servicing through 2026, highlighting a contrasting scenario. However, the International Monetary Fund has expressed apprehension over the US's spending levels, deeming them unsustainable in the long run.