With unprecedented global debt levels and real interest rates at their highest since 2007, all eyes are on potential risks in global debt markets. Government borrowing needs have increased sharply over the past decade, exacerbated by growing geoeconomic fragmentation and strategic competition. This is putting still more pressure on government budgets and in some cases fueling concerns about debt sustainability. The weight of all this debt, in turn, is contributing to slower productivity growth across major economies.
A key concern is an apparent lack of political will to address rising sovereign debt levels, both in mature and emerging markets. Across sectors, persistent reliance on government intervention risks moral hazard - and can also lead to misallocation of resources toward low-productivity projects. This trend is evident in the growing sovereign-bank nexus (particularly in emerging and developing economies), and the proliferation of zombie firms - companies that are only able to survive with very low borrowing cost - in many countries.
Absent a more disciplined approach to fiscal policy and resource allocation, these hidden vulnerabilities could further undermine global growth, potentially leading to a systemic debt crisis with far-reaching consequences. Held during New York Climate Week and the UN General Assembly (UNGA), this invitation-only debt roundtable will convene market and policy experts for an interactive conversation on the changing risks for global debt markets - and the hunt for solutions.
This event is by invitation and will be held under the Chatham House Rule. If you have any questions, please contact [email protected].