by Shah J. Choudhury
Record-high debt poses a major warning for global stability
The world is increasingly weighed down by debt. According to the latest statistics, in the first quarter of 2025, global debt reached nearly $324 trillion—an all-time high. Of this, government debt alone touched $102 trillion in 2024, up from $97 trillion the previous year.
Why Is Debt Rising?
Economists identify several major factors behind the surge in global debt:
• Post-pandemic spending: Many countries borrowed heavily to combat COVID-19 and keep their economies afloat.
• Wars and geopolitical tensions: Conflicts, including the Ukraine war, have increased defense spending.
• Rising interest rates: Globally higher interest rates have made repaying existing debt more difficult.
• Development spending: Investment in infrastructure, health, and social security programs has increased reliance on debt.
Current Situation
The United Nations Conference on Trade and Development (UNCTAD) reports that developing countries are bearing the brunt of this debt burden. Many nations are taking on new debt just to service existing loans, creating a vicious cycle. The impacts are visible in dwindling foreign currency reserves, reduced investment, and constrained social spending.
Even advanced economies, while relatively stable, face rapidly rising corporate and household debt, putting pressure on the banking sector and employment.
Ways to Control Debt
Economists suggest that urgent measures are needed to manage the global debt crisis:
• International cooperation: Organizations like the IMF and World Bank should provide flexibility in debt repayment for developing nations.
• Transparent governance: Governments must reduce wasteful spending and increase accountability.
• Boosting revenue: Expand tax bases and curb tax evasion.
• Responsible borrowing: New loans should only be taken after evaluating project feasibility.
• Alternative financing: Focus on investment, exports, and production growth rather than over-reliance on debt.
Editorial Perspective
In my view, the $324 trillion global debt is not just a statistic—it is a question about the future of human civilization.
The world economy seems to be walking a tightrope. Governments rely on debt to maintain political popularity, corporations borrow endlessly in pursuit of profits, and ordinary people turn to banks just to survive. Together, these three layers create a monstrous cycle that is difficult to break.
The most unfortunate aspect is that ordinary citizens bear the real burden of this debt. When a country falls into a debt trap, spending on education, healthcare, and social security is often reduced. The consequences affect people’s livelihoods, their dreams, and even the future of the next generation.
The time has come to shift from a “debt culture” to a “production and sustainable development culture.” Developing nations require debt relief or rescheduling under flexible terms. Countries must build transparent governance and treat debt as a last resort, not a primary solution.
Otherwise, the towering debt of today could one day collapse onto the global economy, and its impact will be far harder to manage.
Sources: Reuters, UNCTAD, AP News
