The second edition of the Janus Henderson Sovereign Debt Index, an annual long-term study into trends in government indebtedness around the world, shows that global government debt jumped to US$65.4 trillion in 2021 as every country we examined increased borrowing. Global Bonds Portfolio Manager Bethany Payne discusses the study’s findings and our outlook for 2022.

 Key takeaways

  • Since the pandemic began, global sovereign debt has soared by over a quarter, up from US$52.2 trillion in January 2020 to today’s record of US$65.4 trillion.
  • Despite the surging level of borrowing, debt servicing costs fell to a record low of US$1.01 trillion in 2021, an effective interest rate of just 1.6%.
  • We predict government debt will rise 9.5% in 2022, with the US, Japan and China accounting for most of that increase.