Issue No agreed threshold marks the point where government debt becomes unsustainable

Summary

MGI states that no universally agreed threshold or band identifies the point at which government debt becomes unsustainable, and that this holds especially for high-income economies issuing debt in their own currency.

Classification

Main topicMacroeconomy & Finance

Secondary topicsDemocracy & Governance

Region menusGlobal

Impactscope:global

Time horizonnot assigned

Last updated2026-07-29 04:49:52

Evidence 2

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
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

Constituent trends 1

TrendGovernment debt keeps expanding as interest rates approach or exceed growth rates3 signals

Directly linked signals 1

SignalThe gap between growth and interest rates approached zero and may have flipped in the US in 2025

Relation types: constitutes · direct_urgent

Public id: fm-e45e8b579b36