$88 trillion in debt and a wave of elections. World leaders are hamstrung

World leaders are gathering at Davos this week to address urgent global issues. Wars, a shipping crisis, cyber attacks, and the climate emergency are among the key topics of discussion. However, addressing these challenges will be difficult due to the unprecedented global debt of $88.1 trillion. The pandemic caused public debt to skyrocket, and this year’s new borrowing is set to break records in several major economies. Rising debt servicing costs will further limit efforts to tackle climate change and support aging populations. Governments might find themselves unable to borrow more, leading to spending cuts or tax hikes, hindering their ability to respond to future shocks.