By Yoruk Bahceli, Ben Welsh, Dhara Ranasinghe and Rocky Swift LONDON, May 18 The world’s major economies have seen their debt levels surge in recent years, while ever-increasing spending demands – from ageing populations to climate change and defence – add to the pressure.
Enter the Iran war, which has rekindled inflation risks that will strain governments hit by a multitude of shocks this decade alone
With no end in sight to the conflict, the pressure is building as traders bet on central bank rate hikes and long-term borrowing costs march higher. U.S. 30-year borrowing costs have risen above 5%, touching a one-year high on Monday, and 10-year Japanese bond yields reached a 30-year high. A high debt burden that costs a government more risks hurting living standards by constraining spending and curbing growth.
This live dashboard tracks key measures of government debt across the Group of Seven advanced economies: RISING BORROWING COSTS G7 government bond yields have surged following the COVID-19 pandemic and Russia’s invasion of Ukraine, as central banks raised interest rates aggressively to tame surging inflation. Elevated longer-term borrowing costs also reflect investors demanding better returns to compensate for the risk of holding the debt. The Iran war is the latest challenge.