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Friday, 23rd October 2026
Global Debt Surpasses $365 Trillion as Borrowing Costs Mount; Bangladesh Ranks 45th
23 October 2026 19:10 PM
NEWS DESK
Global debt continues to climb, rising by $10 trillion in the first half of this year alone to exceed $365 trillion, according to the Institute of International Finance (IIF). The United States accounts for the largest share of government debt, while Bangladesh ranks 45th globally in total debt.
As borrowing increases, governments are also facing mounting interest payments, putting pressure on public finances. The growing cost of servicing debt is making it increasingly difficult for countries to maintain spending on essential sectors such as education, healthcare, infrastructure and pensions.
Across Europe, public frustration is growing over the rising cost of living, low wages, housing shortages and funding constraints in educational institutions. Protests over these issues have taken place in France, Belgium, Italy and Portugal, with some demonstrations reportedly involving clashes, arson and looting.
The mounting debt burden is raising concerns not only about Europe's economic outlook but also about governments' ability to manage their finances. After years of borrowing to sustain spending, many countries are now having to find additional resources to cover rising interest costs. In France, borrowing costs have reached their highest level since 2002.
An analysis by international news network Al Jazeera has examined the scale of global debt, how governments raise money and the growing financial pressure associated with debt repayments.
The United States has the world's largest government debt, at $41.4 trillion, equivalent to 127 per cent of its gross domestic product (GDP).
The dollar's status as the world's primary reserve currency gives Washington a significant advantage in borrowing. US government bonds also attract strong demand from international investors. However, these advantages do not mean the country's borrowing capacity is unlimited.
China ranks second, with government debt of $22.5 trillion, equivalent to 104 per cent of GDP.
Japan ranks third, with government debt of $8.7 trillion. Among major economies, Japan has the highest debt-to-GDP ratio, at 199 per cent.
The United Kingdom has government debt of $4.4 trillion, equivalent to 102 per cent of GDP, followed by France with $4.2 trillion, or 118.5 per cent of GDP.
Italy's government debt stands at $3.7 trillion, equivalent to 138 per cent of GDP. Germany, by comparison, has government debt of $3.5 trillion, representing 65 per cent of GDP.
Bangladesh ranks 45th in the global debt league table, with total debt reported at $204.9 billion.
The country's debt stood at $40.9 billion in 2010, meaning it has increased nearly fivefold over the past 15 years.
However, the overall amount of debt does not tell the whole story. Debt relative to the size of an economy is another important indicator of its capacity to repay.
Bangladesh's debt-to-GDP ratio is approximately 40 per cent, considerably lower than that of many advanced economies included in the ranking.
Unlike individuals and businesses, which commonly borrow from banks, governments typically raise funds by issuing bonds. Investors purchase these securities, effectively lending money to the government in exchange for regular interest payments and the return of the principal when the bonds mature.
For example, an investor who purchases a 10-year government bond worth €100 with an annual interest rate of 5 per cent receives €5 in interest each year. Over the 10-year period, the investor collects €50 in interest and receives the original €100 when the bond matures.
When governments have to offer higher interest rates to attract investors, the cost of borrowing rises. This puts additional pressure on public budgets and can force governments to reduce spending in other areas.
As a result, funding for education, healthcare, transport, infrastructure and social security programmes may come under pressure as interest payments consume a larger share of government revenue.
France has become a particular focus of concern over rising borrowing costs.
The country is paying approximately 5 per cent to borrow for 10 years in the eurozone bond market, compared with 3.41 per cent for Germany. France's borrowing costs are also higher than those of Italy and Greece. Outside the eurozone, the United Kingdom is currently paying more than France to borrow.
Higher yields mean that governments must offer investors greater returns to secure financing. As existing debt matures and new borrowing is issued at higher rates, the burden of interest payments can grow further.
This can narrow governments' room for manoeuvre, particularly when they are already struggling with budget deficits and competing demands for public spending.
According to the IIF, global debt increased by $10 trillion during the first six months of the year, taking the total above $365 trillion. The figure includes borrowing by governments, households and corporations.
On a per capita basis, the global debt burden amounts to approximately $44,000 for every person worldwide.
The cost of servicing debt is also substantial. Advanced economies paid more than $3.3 trillion in interest on government bonds over the past year.
That amount exceeds estimated global military expenditure of $3.1 trillion and spending on artificial intelligence, estimated at $2.6 trillion. It is also significantly higher than the $2.3 trillion spent on clean energy.
The scale of these interest payments highlights the growing competition for public and private financial resources. As more money goes towards servicing existing debt, governments may have less room to finance development projects and public services.
To manage the pressure, some governments may have to raise taxes, while others could cut spending on education, healthcare and other programmes.
The expansion of global debt highlights the importance of not only raising funds but also maintaining the ability to repay them sustainably.
Borrowing can help governments finance infrastructure, support economic activity and respond to emergencies. However, when debt accumulates faster than an economy's capacity to service it, rising interest costs can become a long-term fiscal constraint.
The consequences can extend beyond government balance sheets, affecting public services, investment, employment and household living standards.
With global debt now exceeding $365 trillion, the challenge for governments is to balance financing needs with sustainable borrowing and manageable debt-servicing costs.
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