Borrowings by governments and companies hit a record $US27 trillion in 2025, according to an OECD report released this week.
The OECD Global Debt Report said debt remained “resilient” during the year despite geopolitical tensions, trade disputes and risks around growth prospects.
The report projects that borrowing will rise further in 2026, to $US29 trillion, driven by growing sovereign funding needs and increasing corporate sector use of debt markets.
It also points to changes in the bond market investor base, including the “growing role of more price-sensitive and leveraged investors that may leave markets more vulnerable to shocks”.
“Global debt markets have remained resilient as borrowing has hit record highs, but debt-servicing costs are increasing, and AI-related financing needs are growing sharply,” OECD Secretary-General Mathias Cormann said.
“To safeguard stability in the years to come while meeting growing public and private financing needs, governments need to address volatility risks stemming from shifts in the debt investor base, pursue sound fiscal policies to enhance debt sustainability, and strengthen medium-term growth prospects.”
The report said borrowing costs remained a concern with elevated sovereign real yields and higher interest rates beginning to flow through to the corporate debt stock.
“Sovereign borrowers have responded by shifting their issuance towards shorter maturities, in an effort to mitigate interest expenditures,” the report said.
“The share of issuance in 2025 with a maturity over 10 years reached its lowest point since 2009 for sovereign borrowers, and the lowest on record for corporates.”
The report said technology companies were set to become ever-larger issuers in debt markets as they shifted their funding model from internally generated cash to external funding to finance the capital-intensive AI expansion, notably data centres.
“In 2025, nine major players commonly known as ‘hyperscalers’ raised an aggregate of $US122 billion from bond markets, accounting for nearly half of all technology firm issuance globally,” it said.
“AI transformation is set to become a major financing event in global markets for years to come, possibly setting debt markets on a course towards greater concentration, similar to developments in equity markets in recent years.
“The nine hyperscaler firms alone have projected cumulative capital expenditure of $US4.1 trillion from 2026 to 2030, about 35 percent more than total capital expenditure by all US non-financial companies in 2025.”
Go here for further information on the report with key findings and charts.
The OECD is a global policy forum “that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world”.
