Trend Government debt keeps expanding as interest rates approach or exceed growth rates
Summary
MGI reports that with interest rates staying elevated across advanced economies and reaching or exceeding expected growth rates, government debt sustainability moves into the spotlight and economies may no longer be able to grow their way out of debt.
Classification
Main topicMacroeconomy & Finance
Region menusGlobal
Impactscope:global
Time horizon0-3 years (2026-07-26)
Last updated2026-07-29 04:49:52
Evidence 2
- The global balance sheet 2026: Imbalance and divergence McKinsey Global Institute page=21;section=Is the balance sheet 'in balance?' / Debt 2026-07 accessed 2026-07-26
- The global balance sheet 2026: Imbalance and divergence McKinsey Global Institute page=22;section=Is the balance sheet 'in balance?' / Sidebar: When could government debt become unsustainable? 2026-07 accessed 2026-07-26
Observed signals 3
Part of issues 2
- IssueNo agreed threshold marks the point where government debt becomes unsustainable1 trends · 1 signals
- IssueThe US fiscal tightrope: too little tightening risks crisis, too much risks stagnation1 trends · 1 signals
Relation types: constitutes · supports
Public id: fm-9876fa6fcbb1