ISTANBUL 

Public debt levels are rapidly rising to worrying levels as governments start repaying it at soaring interest rates, experts said Thursday at the World Economic Forum in Davos, Switzerland.

“We need an absolute pivot, because this is not business as usual,” said International Monetary Fund (IMF) Deputy Chief Gita Gopinath.

"It is worse than you think," she said, adding that estimates for growth in debt levels have fallen short due to an "optimism bias."

She said the issue is not just that the global public debt has now reached about $100 trillion, but also that paying it down is now much more costly due to rising interest rates.

“3.3 billion people in the world live in countries that are spending more on servicing the debt than on education or health,” noted UN Trade and Development Secretary-General Rebecca Grynspan.

According to Grynspan, this also implies that any growth that is mustered would be less likely to be sustainable.

David Schwimmer, CEO of the London Stock Exchange Group, pointed to political leaders' unwillingness to confront the growing public debt crisis.

During a panel in Davos, he said “there was an enormous missed opportunity after the (coronavirus) pandemic.”

He noted that governments could have seized the chance to explain the downsides of their heavy spending, which was meant to maintain stability during a health crisis.

Developed economies have been suffering from soaring public debt as debt-to-GDP ratios have climbed to alarming levels.

The debt-to-GDP ratio is around 255% in Japan, while as of 2023, it was 122% in the US, 111% in France, 108% in Canada and is currently 97.6% in the UK.