The national debt of developed countries has doubled in 15 years

By the end of 2023, the total debt of OECD countries amounted to $54 trillion, which is $30 trillion more than it was 15 years ago, in 2008, the organization calculated. According to analysts’ forecasts, in 2024 the figure will increase further – to $56 trillion.

More than half of the debt is in the United States (about $30 trillion; see chart). According to the US Treasury, Japan and China remain the largest creditors of this country among states. China, against the background of the economic confrontation with the United States (for example, see Kommersant on March 6), gradually reduced the volume of investments in American government bonds, but the demand of other countries for them remains stable.

According to OECD estimates, in 2023 the European Union accounted for about 20% of the total debt of developed countries, Japan – 16%, and the UK – 6%. The ratio of OECD countries’ debt to GDP in 2023 as a whole was approximately 83% (after 82% in 2022). In 2024, the figure, the organization believes, will increase to 84%. Despite its overall stability, the breakdown by country shows mixed trends: for example, in the United States, the ratio of public debt to GDP in 2023 increased (by about 3%, to 123%), while in Japan, Portugal and Spain it decreased.

Servicing government debt by the EU countries and the US became more expensive in 2023, which is largely explained by the strict monetary policy of the ECB and the Federal Reserve (see Kommersant on January 12). Let us recall that in 2008–2022, conditions in the debt market were noticeably more comfortable than now: governments and companies took out loans at low rates, extended repayment terms and increased the share of fixed-rate bond issues. Largely because of this, the impact of rising interest rates in 2023 remained moderate. However, about 40% of government and 37% of corporate bonds in the world will be due by 2026, according to OECD estimates, which in turn will require further borrowing at higher rates.

Note that the OECD records the continued growth of the market for “sustainable” bonds (for environmental and social projects). By the end of 2023, the volume of such outstanding bonds in the world amounted to $4.3 trillion (2018: $641 billion). According to the organization, the noticeably grown market for “sustainable” debt now requires a more detailed assessment of its functioning.

Kristina Borovikova