The latest report from the Institute of International Finance (IIF) shows that as of the end of 2025, the global debt scale exceeded 348 trillion US dollars, a record high, equivalent to nearly 3 times the global GDP. The annual increase reached 29 trillion US dollars, the fastest growth rate since 2020, among which government debt has become the main driver of debt expansion.

The US debt problem is particularly prominent. As of the end of 2025, the total federal debt exceeded 38 trillion US dollars, equivalent to 124% of its GDP. The net interest expenditure on national debt in the 2025 fiscal year is expected to reach 970 billion US dollars, exceeding the 917 billion US dollars of defense expenditure for the first time. The daily interest payment alone reaches 2.6 billion US dollars, and it can only maintain operation by borrowing new debts to repay old ones. It is estimated that by 2036, the proportion of federal debt held by the US public to GDP will soar to 120%.

Japan’s debt situation is also grim. As of the end of 2025, the total national debt exceeded 1,342 trillion yen, a record high. Its government debt-to-GDP ratio is close to 230%, ranking first among developed economies. It is estimated that by the end of March 2026, the total debt will reach 1,473.5 trillion yen. The huge debt has greatly reduced the fiscal space of the two countries, forcing them to cut investment in people’s livelihood, infrastructure and other fields, falling into the dilemma of “interest swallowing”.

In addition, the debt repayment pressure on developing countries has intensified. Between 2022 and 2024, the outflow of debt repayment funds exceeded the inflow of new financing by 741 billion US dollars. The fragility of the global financial system continues to rise, and the foundation of the US dollar hegemony has also loosened due to the debt problem.