Soaring global debt could trigger a crisis worse than 2008

As attention focuses on US President Donald Trump's tariff policies, which many believe could lead to a vicious cycle and pose significant risks to financial markets, numerous investors overlook the rising government debt in countries around the world.

This increasing debt is likely to drive bond yield rates up, leading to potential debt crises in various nations - an issue that warrants greater concern.

The primary reasons for the escalating debt include government spending increases initiated in response to the Covid-19 pandemic to stimulate the economy.

This has resulted in businesses and individuals becoming overly dependent on government expenditure.

Consequently, any reduction in government spending could swiftly slow down the economy.

As a result, governments continue to maintain or increase their spending levels to prevent their economies from declining, and this has led to significant fiscal deficits and a need to issue more debt to support their expenditures.

While European and American nations have proposed solutions to address the Russia-Ukraine conflict, tangible progress has yet to be made.

The situation in the Middle East also remains tense, and rising suspicions among countries contribute to ongoing geopolitical instability.

This instability has prompted many governments to increase their military spending, further driving up overall government expenditures and debt levels.

If this trend continues, the world risks facing a financial crisis even more severe than that of 2008.

Andrew Wong is a veteran independent commentator