Public debt, while essential for development, can become a significant burden when it grows too rapidly or excessively. This is currently taking place in many developing countries, primarily due to two key factors. First, the need for financing has surged as countries grapple with a series of crises, such as the COVID-19 pandemic, the cost-of-living crisis, and climate change, all of which demand substantial resources. Second, an unequal international financial system results in inadequate and costly financing options for developing countries. Accordingly, the weight of this debt hampers developmental progress while rising borrowing costs, currency devaluations, and slow-moving economic growth further compound the challenges for these countries. Ultimately, these factors hinder their capacity to respond to emergencies, and invest in their citizens and their future. Countries are now confronted with the unenviable choice of servicing their debt or meeting the needs of their people.
In this paper, we will discuss global debt levels, with brief emphasis on those of the US and the European zone.
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