OECD nations face $2 trillion annual interest burden on sovereign debt

OECD member nations are now paying more than $2 trillion annually in interest on their sovereign debt, according to the OECD Global Debt Report 2026. This interest burden has risen to 3.3 percent of the collective gross domestic product (GDP), up from 2.4 percent in previous years.

In several major economies, including the United States, the United Kingdom, and France, interest payments have surpassed spending on defense. This shift limits the capital available for other critical sectors such as healthcare, infrastructure, energy security, and housing.

The financial landscape is changing as the era of low interest rates ends. Governments are increasingly replacing old, low-cost debt with new, more expensive debt. OECD countries are expected to borrow a record $18 trillion this year, while combined borrowing by governments and corporations within the OECD is projected to reach $29 trillion, a 17 percent increase over 2024.