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OECD, IMF and IIF warn rising debt and borrowing costs threaten growth

The IIF said the buildup in global debt is likely to accelerate, projecting a structurally debt-intensive future as governments and corporates face higher interest-rate burdens.

Reported · Written up by our desk · Economy

The OECD, the IMF and the International Institute of Finance have issued a coordinated warning that rising debt levels and higher borrowing costs pose risks to the global economy, citing pressure from interest rates on large volumes of outstanding borrowing.

According to the IIF, global borrowing totals $365tn, and it warned that governments and companies are heading toward a “structurally debt-intensive future,” with debt growth expected to accelerate as authorities compete to boost growth amid structural changes and ageing-related costs.

The OECD also flagged the rising cost of servicing government debt as a key risk in the months ahead, while noting that global growth has been more resilient than expected despite strains linked to the US-Israel war on Iran and a recent resurgence in oil and gas prices.

In parallel, the IIF compared conditions in some large advanced economies, including the UK, with challenges seen in crisis-hit emerging countries, as the UK prime minister pushed back on claims about shock over the state of public finances.

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