ANKARA

Governments and companies worldwide borrowed $25 trillion from markets in 2024, marking a $10 trillion rise compared to pre-COVID levels and three times the amount borrowed in 2007, according to the OECD’s Global Debt Report 2025 released on Thursday.

Debt levels are projected to rise further, with OECD countries’ central government marketable debt-to-GDP ratio expected to reach 85% in 2025, up more than 10 percentage points from 2019 and nearly double the 2007 level.

The report noted that despite falling policy rates, bond yields in key markets have risen, while both sovereign and corporate indebtedness have grown. This has resulted in higher borrowing costs, potentially constraining future investment at a time when substantial funding is needed for long-term growth, productivity, aging populations, and defense.

OECD Secretary-General Mathias Cormann stressed the importance of efficient public spending and prioritizing productive investments.

"Sovereign and corporate debt levels continue to grow at a time of increasing borrowing costs and market volatility," Cormann said.

Sovereign bond issuance in OECD countries is set to reach $17 trillion this year, a rise from $14 trillion in 2023, with total outstanding debt projected to grow from $54 trillion to nearly $59 trillion in the same period.

Corporate debt worldwide reached $35 trillion by the end of 2024, primarily led by non-financial companies. However, much of this debt has been used for refinancing and shareholder payouts rather than for investment in productivity-enhancing projects.

In emerging markets, sovereign debt issuance increased by 12% in 2024, with China contributing 45% of the total, up significantly from 17% in the 2007-2014 period.

Higher borrowing costs are already impacting government budgets, with interest payments as a share of GDP rising in about two-thirds of OECD countries in 2024, averaging 3.3%.

This exceeds aggregate spending on defense and raises refinancing risks, as nearly 45% of sovereign debt and one-third of corporate debt is set to mature by 2027.

The withdrawal of central banks from sovereign debt markets continued in 2024, increasing reliance on private and foreign investors, which could heighten market volatility.

Previously, the Institute of International Finance (IIF) announced that the amount of global debt rose to a record high of $318 trillion last year.