According to the recent report by the Economic Cooperation and Development Organization (OECD), the outstanding price of government and corporate bonds around the world has exceeded $ 100 trillion in 2023. In such a situation, every human being is a borrower according to the population of 800 billion of the world and every human has a debt of more than 100 rupees. According to the OECD report, the situation is becoming difficult for the borrowers due to rising interest rates. In such a situation, governments and companies will now have to give priority to their investment, so that their debt can prove to be productive.
According to the Reuters report, the share of interest cost between 2021 and 2024 has reached the highest level of 20 years at the highest level from the lowest level. The cost of governments on interest payment in OECD member countries has now increased to 3.3% of GDP, which is more than the defense budget.
Although central banks have recently cut interest rates, the borrowing cost still remains at a high level. Debt service costs are increasing due to rising interest rates, causing loan management for governments and companies.
OECD has suggested that governments and companies should change their borrowing strategies. They should ensure that the amount borrowed is used in productive investments supporting long -term development, so that economic stability can be ensured.
In the current economic landscape, it is necessary to adopt strong financial policies to maintain financial stability for governments and companies, with high debt levels and rising interest costs. It is important that they use their financial resources effectively and be cautious in debt management.
This report of OECD clearly shows that debt management responsible for global economic stability and use of borrowings towards productive investments is extremely important.
The central banks are decreasing their bond holdings, increasing the share of foreign investors and domestic retail investors. According to the report, foreign investors' share in domestic government debt of OECD countries was 29% in 2021, which has increased to 34% in 2024. The share of domestic investors has also increased from 5% to 11%.
