Global Debt Tops $365 Trillion as Interest Bills of $3.3 Trillion Outstrip World Military Spending

Government, corporate and household debt around the world has reached an unprecedented level. According to the Washington-based Institute of International Finance (IIF), global debt rose by $10 trillion in just the first six months of 2026, taking the total past $365 trillion — equal to roughly $44,000 for every person on Earth.

The IIF data show that debt is growing fastest in emerging economies. The surge is not just a matter of numbers: it is paid for directly through interest, and that bill now exceeds the total spending of several of the world's largest sectors.

An analysis found that in the past year alone, advanced economies had to spend more than $3.3 trillion just servicing interest on government bonds. That enormous sum is larger than total global military spending ($3.1 trillion), investment in artificial intelligence ($2.6 trillion) and investment in clean energy ($2.3 trillion).

The added pressure of servicing ever-growing debt is hitting everyday life in Europe directly. In protest at the high cost of living, low wages, a housing crisis and shortfalls in education budgets, millions of people have recently taken to the streets in France, Belgium, Italy and Portugal.

In France, the interior ministry's own count put more than 550,000 people at protests in a single day. The country's borrowing cost — the interest rate on 10-year bonds — has climbed to about 5 percent, its highest since 2002 and far above Germany's 3.41 percent. France's cost of debt is now even higher than that of Italy and Greece, countries hit by major crises in the past; in Europe, only the United Kingdom pays more.

According to International Monetary Fund (IMF) forecasts, France's government debt could reach 121.8 percent of gross domestic product (GDP) by 2030; it currently stands at $4.2 trillion, or 118.5 percent of GDP.

In dollar terms, the United States has by far the largest government debt in the world, at $41.4 trillion, or 127 percent of GDP. China is second with $22.5 trillion (104 percent of GDP).

Japan's total debt is $8.7 trillion, but relative to the size of its economy its burden is the highest among the world's largest economies, at 199 percent of GDP. Among other major countries, the United Kingdom's government debt is $4.4 trillion (102 percent of GDP), Italy's is $3.7 trillion (138 percent) and Germany's is $3.5 trillion (65 percent).

Governments generally raise money by issuing bonds with fixed maturities to cover revenue shortfalls. But when bond market prices fall and yields — the expected return — rise, governments must pay extra interest, which becomes a heavy burden on the state treasury.

With a significant share of state income locked into servicing old debt, allocations for public welfare sectors such as education, health, social security, pensions and infrastructure are being severely squeezed. To fill the gap, governments are being forced to raise taxes or depend on yet more borrowing.

Rising government bond yields also spill into the private banking sector, pushing up interest rates for ordinary people on home loans, car purchases and credit cards. In other words, the pressure of state debt ultimately reaches the monthly budget of ordinary households.

The analysis argues that while debt is a major tool for a country's infrastructure and economic growth, such a heavy long-term interest burden limits governments' financial capacity and the independence of sovereign policymaking, pushing the global economy toward deeper uncertainty.

The question now is how governments will find a way out of this debt cycle — by raising taxes, cutting spending, or growing their economies. The protests on Europe's streets already suggest that whichever path is chosen, the pressure on ordinary people is unlikely to ease.