Global debt tops $365 trillion as interest costs outpace AI and defense spending

September 24, 2026 at 01:27 PM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

Global debt rose by $10 trillion in the first half of the year to top $365 trillion, according to the Institute of International Finance. Advanced economies paid over $3.3 trillion in interest on internationally traded government bonds last year, exceeding global spending on AI, defense, or clean energy. The IIF warns of a vicious cycle between elections, short-term fixes, and long-term vulnerability.

Key Facts

Global debt rose by $10 trillion in the first half of the year to top $365 trillion, according to the Institute of International Finance.
Advanced economies paid over $3.3 trillion in interest on internationally traded government bonds last year, exceeding global spending on AI ($2.6 trillion), defense ($3.1 trillion), or clean energy ($2.3 trillion).
Yields on medium- and long-term government bonds in the U.S., Japan, France, and the U.K. hit their highest levels in more than a decade.
IMF chief Kristalina Georgieva told the BBC that shocks to the global economy were pushing debt levels up like a staircase not to heaven.

Rising Debt Burden

The Institute of International Finance reported that global debt rose by $10 trillion in the first half of the year to top $365 trillion. The IIF highlighted the U.S., Japan, France, and the U.K. as facing persistently large deficits and rising interest expenses, challenges long associated with debt-distressed emerging market sovereigns. Advanced economies paid over $3.3 trillion in interest on internationally traded government bonds last year. That interest bill exceeded global spending on AI ($2.6 trillion), defense ($3.1 trillion), or clean energy ($2.3 trillion).

Policy Warnings

The IIF warned of a vicious cycle between elections and short-term quick fixes, and a long-term vulnerability as the marginal utility of higher debt diminishes. The OECD said rising bond yields showed the need for greater efforts to contain and reallocate government spending, improve public sector efficiency, and strengthen revenues. IMF chief Kristalina Georgieva told the BBC that shocks to the global economy were pushing debt levels up like a staircase not to heaven. Georgieva said governments must bring debt levels down, put fiscal consolidation as a priority, and ensure central banks deliver on their mandate for price stability.