Global debt tops $365 trillion as economists sound alarm over 'vicious cycle'

Global debt climbed $10 trillion in the first half of 2024 to surpass $365 trillion, according to economists who warn that debt-service costs now exceed worldwide spending on artificial intelligence, defense, or clean technology combined.

Advanced economies face mounting pressure as interest payments consume a growing share of fiscal budgets. The pace of debt accumulation—$10 trillion in six months—underscores what analysts describe as a "vicious cycle" where rising borrowing costs force governments to allocate more revenue to interest rather than productive investment.

The warning comes as central banks maintain elevated rates to combat inflation, amplifying the cost of servicing existing debt loads. For governments that relied on cheap financing during the zero-rate era, the shift represents a structural squeeze on budgets already strained by pandemic-era spending.

The comparison to AI, defense, and clean-tech spending highlights the scale: debt service has become one of the largest line items in national budgets, crowding out capital that might otherwise fund growth or infrastructure.