Governments and companies borrowing hit a record $27 trillion in the past year with a prediction that the coming year will see that figure exceeded.

In a new report the OECD said global debt markets remained resilient in 2025 amidst geopolitical tensions, trade disputes, and risks for growth prospects as governments sought to borrow.

The OECD Global Debt Report 2026: Sustaining Debt Market Resilience Under Growing Pressure, highlighted low levels of volatility, improving liquidity and corporate spreads at near-historic lows across the $109 trillion global bond market, which now stands at 93% of world GDP, up from 81% in 2015.

The report projects that borrowing will rise further in 2026, to $29 trillion, driven by growing sovereign funding needs and increasing corporate sector use of debt markets. It also points to significant changes in the bond market investor base, notably the growing role of more price-sensitive and leveraged investors that may leave markets more vulnerable to shocks.

“Global debt markets have remained resilient as borrowing has hit record highs, but debt-servicing costs are increasing, and AI-related financing needs are growing sharply,” OECD secretary-general Mathias Cormann said. “To safeguard stability in the years to come while meeting growing public and private financing needs, governments need to address volatility risks stemming from shifts in the debt investor base, pursue sound fiscal policies to enhance debt sustainability, and strengthen medium-term growth prospects.”

Sovereign bond issuance in OECD countries is projected to reach a record $18 trillion in 2026, up from $12 trillion in 2022. Outstanding debt is estimated to have risen from $55 trillion in 2024 to $61 trillion in 2025. Debt relative to GDP remained stable, at 83% in the OECD countries, but is projected to rise to 85% in 2026.

In emerging markets and developing economies, sovereign borrowing from debt markets hit $4 trillion in 2025, bringing the total debt stock to $14 trillion, or 30% of GDP, the highest level since 2007.

Corporate borrowing from markets reached its highest level ever in real terms in 2025, with total debt raised across corporate bond and syndicated loan markets hitting $13.7 trillion, surpassing the 2021 peak of $.5 trillion. Outstanding debt reached USD 59.5 trillion at year-end 2025, of which U$36.4 trillion in bonds and USD 23.1 trillion in syndicated loans. Given the scale of capital expenditure required to finance the expansion of AI technology, corporate borrowing needs are expected to increase substantially going forward.

Borrowing costs remain a concern, the report warned. Sovereign real yields are elevated, especially at longer maturities, and higher interest rates are beginning to flow through to the corporate debt stock. Sovereign borrowers have responded by shifting their issuance towards shorter maturities, in an effort to mitigate interest expenditures. The share of issuance in 2025 with a maturity over 10 years reached its lowest point since 2009 for sovereign borrowers, and the lowest on record for corporates.

Corporates, whose borrowing predominantly carries fixed-rate interest structures, have not seen their interest expenditure increase as much as sovereigns, but the shift towards higher interest spending is also clearly visible. Securities with an interest rate above 4% made up half of outstanding investment grade bonds at the end of 2025, while 15% of outstanding non-investment grade bonds cost 8% or more, up from 10% of outstanding bonds in 2021. As near-term refinancing needs disproportionately consist of low-cost debt, this trend is expected to continue.

Central banks remain the largest domestic holders of government debt in many OECD countries, but, as they have reduced their balance sheets, the market is increasingly dependent on price-sensitive investors, such as hedge funds, households, and certain institutional investors. This transition in the sovereign debt market – from price-insensitive demand of central banks to price-sensitive demand from other investors – has the potential to increase market volatility and can be expected to reverberate in the corporate market as well.

The report added AI transformation is set to become a major financing event in global markets for years to come, possibly setting debt markets on a course towards greater concentration, similar to developments in equity markets in recent years. The nine hyperscaler firms alone have projected cumulative capital expenditure of $4.1 trillion from 2026 to 2030, about 35% more than total capital expenditure by all US non-financial companies in 2025. If half of these investments were financed by bond markets, these nine firms would represent 15% of global historical average issuance by non-financial issuers annually.

The report projects that borrowing will rise further in 2026, to $29 trillion, driven by growing sovereign funding needs and increasing corporate sector use of debt markets. It also points to significant changes in the bond market investor base, notably the growing role of more price-sensitive and leveraged investors that may leave markets more vulnerable to shocks.