Governments around the world face a great day of reckoning with trillions of dollars in debt.
A so-called ‘maturity wall’ of debt that advanced economies must refinance will come down by 2026.
And that large wall of debt is expected to rise to more than $33 trillion by the time it needs to be refinanced, the Financial Times reports.
That represents an increase of almost 20% in the annual need for debt refinancing and is three times the annual capital expenditure of the countries in question.
The looming debt wall 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.
As the deadline approaches, countries are already injecting money into the system.
Global liquidity has risen by $16.1 trillion in the past 12 months and by $5.9 trillion since the end of June, the FT estimates, as central banks start cutting interest rates.
The new figures come as the International Monetary Fund is sounding the alarm about rising national debt.
The IMF says the total amount of global government debt will exceed $100 trillion by the end of this year, representing about 93% of global GDP.
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