Global Debt Hits Record High
Global debt markets showed strong resilience in 2025 despite geopolitical tensions, trade conflicts, and concerns about economic growth. Governments and companies collectively borrowed a record USD 27 trillion, according to a new OECD report.
The OECD Global Debt Report 2026: Sustaining Debt Market Resilience Under Growing Pressure notes that volatility remained relatively low, liquidity improved, and corporate bond spreads stayed close to historic lows within the USD 109 trillion global bond market. This market now equals about 93% of global GDP, up from 81% in 2015.
The report forecasts that total borrowing will increase further in 2026 to around USD 29 trillion. This rise is expected to be driven by greater sovereign financing requirements and increased reliance on debt markets by corporations. It also highlights a shift in the investor base toward more price-sensitive and leveraged participants, a trend that could make markets more vulnerable to sudden shocks.
OECD Secretary-General Mathias Cormann stated that while debt markets have remained stable despite record borrowing levels, debt-servicing costs are climbing and financing demands linked to artificial intelligence are rising rapidly. He emphasized that governments must address volatility risks associated with changing investor dynamics, maintain sound fiscal policies to ensure debt sustainability, and strengthen medium-term growth prospects to preserve stability.
Sovereign bond issuance among OECD countries is expected to reach a record USD 18 trillion in 2026, compared with USD 12 trillion in 2022. Outstanding sovereign debt is estimated to have increased from USD 55 trillion in 2024 to USD 61 trillion in 2025. While debt levels relative to GDP remained steady at about 83% across OECD countries, they are projected to rise to 85% in 2026.
In emerging markets and developing economies, sovereign borrowing from debt markets reached USD 4 trillion in 2025, pushing total sovereign debt to USD 14 trillion—equivalent to about 30% of GDP, the highest level since 2007.
Corporate borrowing also reached record levels in real terms during 2025. Companies raised a combined USD 13.7 trillion through corporate bonds and syndicated loans, surpassing the previous peak of USD 13.5 trillion recorded in 2021. By the end of 2025, outstanding corporate debt stood at USD 59.5 trillion, including USD 36.4 trillion in bonds and USD 23.1 trillion in syndicated loans. With the large capital investments required to expand AI technologies, corporate borrowing is expected to grow further in the coming years.
However, borrowing costs remain a key concern. Real yields on sovereign bonds remain elevated, particularly for longer maturities, and higher interest rates are increasingly affecting corporate debt. To limit interest expenses, governments have shifted their bond issuance toward shorter maturities. In 2025, the share of sovereign bonds issued with maturities longer than ten years fell to its lowest level since 2009, while for corporations it reached the lowest level on record.
Although many corporate loans and bonds carry fixed interest rates—limiting the immediate impact of rising rates—interest expenses are still trending upward. By the end of 2025, half of all outstanding investment-grade bonds carried interest rates above 4%. Meanwhile, 15% of non-investment-grade bonds had yields of 8% or higher, compared with 10% in 2021. As much of the debt due for refinancing in the near term was issued at lower rates, borrowing costs are expected to continue rising.
Central banks remain the largest domestic holders of government debt in many OECD countries. However, as they scale back their balance sheets, markets are becoming increasingly reliant on price-sensitive investors such as hedge funds, households, and some institutional investors. This shift—from central bank demand to more market-driven demand—could increase volatility in sovereign debt markets and potentially spill over into corporate debt markets as well.
The report also highlights how technology companies are likely to become increasingly prominent borrowers as they move from relying on internal cash flows to external financing to support capital-intensive AI investments, particularly data centers. In 2025, nine major technology firms known as “hyperscalers” raised a combined USD 122 billion from bond markets, representing nearly half of all global bond issuance by technology companies.
According to the report, the AI transformation could become a major financing event in global capital markets over the coming years, potentially leading to greater concentration in debt markets—similar to trends already observed in equity markets. These nine hyperscaler companies alone have projected cumulative capital expenditures of USD 4.1 trillion between 2026 and 2030—about 35% more than the total capital spending of all US non-financial companies in 2025. If half of these investments were financed through bond markets, these firms would account for roughly 15% of the historical annual global bond issuance by non-financial corporations.
Source: OECD