France: Government debt payments in the world’s richest countries reached their highest level since 2007, exceeding expenditures on defense, policing, and housing, according to a new report by the Organization for Economic Co-operation and Development (OECD).
The OECD’s Global Debt Report revealed that debt servicing costs among its 38 member nations rose to 3.3 percent of national income in 2024, compared to 2.4 percent in 2021.
By contrast, defense spending stood at 2.2 percent of GDP, while spending on housing and public order accounted for 0.7 percent and 1.7 percent, respectively.
Governments are facing mounting fiscal pressure amid increasing costs related to climate transition efforts, defense spending, and aging populations. In response, many are reassessing budget allocations.
Comparing GDP/capita growth across OECD countries over the past decade (plus selected aggregates like EU/G7/etc). #cdnecon pic.twitter.com/CvacnxGzhn
— Trevor Tombe (@trevortombe) March 19, 2025
Germany’s parliament recently approved a significant infrastructure and defense spending plan, while UK Chancellor Rachel Reeves is expected to announce spending cuts in her upcoming spring statement.
OECD governments collectively raised $15.7 trillion in fresh borrowing last year, pushing total OECD government debt to $55 trillion. Global sovereign debt, including non-OECD nations, reached $65.2 trillion. Corporate debt surged to $35 trillion, bringing total global debt beyond $100 trillion.
The report warns that borrowing costs will continue to rise, further straining government budgets. The OECD expects debt-to-GDP ratios to climb to 85 percent in 2025, nearly double the 2007 level.
With nearly half of OECD government debt maturing by 2027, the risk of refinancing at higher interest rates looms large.
Low-income nations face the greatest challenges, with over 50 percent of their debt coming due within the next three years.
