Governments around the world are facing a major day of reckoning on trillions of dollars of debt.
A so-called “maturity wall” of debt that advanced economies must refinance will descend by 2026.
And that great wall of debt is projected to accumulate to more than $33 trillion by the time it needs refinancing, reports the Financial Times.
That represents a near 20% increase in the annual debt refinancing requirement and is three times the annual capital expenditure of the countries in question.
The looming wall of debt will need to be refinanced within a short time frame, likely at higher interest rates, forcing policymakers to pay careful attention to how they manage liquidity and maintain financial stability.
Nations are already injecting cash into the system as the deadline approaches.
Global liquidity has jumped $16.1 trillion in the last 12 months and $5.9 trillion since the end of June, the FT estimates, as central banks begin to ease rates.
The new numbers come as the International Monetary Fund sounds the alarm on rising government debt.
The IMF says the total amount of global government debt will surpass $100 trillion by the end of this year, which is about 93% of global GDP.
 
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