Governments around the world are facing a massive debt problem. By 2026, a huge amount of debt will need to be refinanced, and it’s only going to get bigger.
The Wall of Debt is Coming
This “maturity wall” of debt is expected to reach over $33 trillion by the time it needs refinancing. That’s a 20% increase in the annual debt refinancing requirement, and it’s three times the annual spending of these countries.
Higher Interest Rates and Tightening Liquidity
Refinancing this massive amount of debt will be a challenge. It’s likely to happen at higher interest rates, which means governments will have to pay more to borrow money. This will force them to carefully manage their finances and keep the economy stable.
Global Liquidity is Rising
To prepare for the upcoming debt crisis, governments are already pumping money into the system. Global liquidity has increased by $16.1 trillion in the past year, and central banks are starting to lower interest rates.
The IMF is Worried
The International Monetary Fund (IMF) is also concerned about rising government debt. They predict that global government debt will surpass $100 trillion by the end of the year, which is about 93% of the world’s total economic output.
This is a serious situation that could have a major impact on the global economy. Governments need to be prepared to deal with this challenge and make sure they can manage their debt responsibly.
