The world is drowning in debt, and Børge Brende, president of the World Economic Forum, says it’s unlike anything we’ve seen in over 200 years.
“We haven’t seen this kind of debt since the Napoleonic Wars,” Brende said during a recent CNBC interview at a WEF conference in Saudi Arabia.
According to the Institute of International Finance, global debt has reached $315 trillion.
That figure includes borrowing by households, businesses, and governments combined.
To put it in perspective, the world’s total economic output in 2024 is about $109.5 trillion.
That means debt is nearly three times larger than global GDP.
Brende warned that the world is nearing a point where total debt equals global GDP, and this could have serious consequences.
“We’re getting close to 100% of global GDP in debt,” he said.
Why Debt Is Rising
According to the International Monetary Fund, global public debt hit $91 trillion, or 92% of GDP, by the end of 2022.
And while some borrowing is normal and even helpful for things like education, home buying, and funding infrastructure, this level of debt is sparking serious concern.
The current debt levels result in part from four major waves of borrowing: Latin America in the 1980s, Southeast Asia around the year 2000, the 2007–2008 global financial crisis, and the post-2010 period intensified by the COVID-19 pandemic.
In 2020 alone, global debt jumped by 28 percentage points, the biggest one-year spike since World War II.
Brende said this debt burden could slow growth and trigger a repeat of the 1970s, when the global economy stagnated for a decade.
“Trade was the engine of growth for decades,” he noted, urging nations to avoid trade wars and focus on cooperation.
Who Owes What
Households are responsible for about $59.1 trillion in debt.
Business debt totals $164.5 trillion, and public sector borrowing stands at $91.4 trillion.
Roughly two-thirds of the $315 trillion global debt comes from mature economies, including the United States and Japan.
Emerging markets hold $105 trillion in debt, with China, India and Mexico leading that category.
The debt-to-GDP ratio in emerging markets recently hit a record 257%, pushing the global average higher again after a few years of stability.
When Debt Becomes a Problem
Debt becomes unsustainable when repayments begin to crowd out essential government spending.
One example is Zambia, which in 2021 spent 39% of its budget on debt servicing, more than it spent on education, health care, and sanitation combined.
The International Monetary Fund has also raised red flags, especially regarding rising U.S. government debt.
The IMF warned that more U.S. borrowing could push global interest rates higher, making it more expensive for other countries to borrow.
In fact, U.S. debt payments are expected to exceed military spending this year.
The Congressional Budget Office projects U.S. public debt could reach 166% of GDP by 2054, up from 99% today.
The Government Accountability Office called this trajectory “unsustainable” and warned it could limit lawmakers’ ability to respond to future crises.
Wall Street Is Paying Attention
Top financial leaders like BlackRock CEO Larry Fink, Citadel CEO Ken Griffin, and JPMorgan CEO Jamie Dimon have all voiced concern about ballooning debt.
Despite all this, global growth is still around 3.2% a year. Brende said that while that’s not terrible, it’s well below the 4% average seen in past decades.
Without action, he said, we risk repeating history.
“We need to consider how to reduce that debt and take the right fiscal measures,” he wrote in his post on X.
“This topic is high on the agenda.”
The conversation on debt isn’t just about numbers anymore. It’s about how long the world can keep borrowing without risking a serious financial crisis.