Global sovereign debt reaches $365 trillion, surpassing post-WWII levels

Global sovereign debt reached $365 trillion in the first half of the year, exceeding post-World War II levels, according to a report by the Institute of International Finance. The International Monetary Fund (IMF) has described the current fiscal situation as “highly worrisome.”

Debt levels are being driven by various factors, including fiscal pressures from conflict that cause energy price spikes and slow economic growth. In the United States, government debt surpassed $40 trillion in August.

IMF Managing Director Kristalina Georgieva noted that volatile energy prices contribute to inflation, which in turn forces central banks to raise interest rates. This cycle increases interest payments, potentially limiting a government's ability to address the high cost of living. The Federal Reserve recently announced its first interest rate increase in over three years, with further hikes anticipated.