Fitch Warns Rising Bond Yields Add $4 Trillion to Debt

Fitch Ratings warned on Tuesday that rising government bond yields are hindering the ability of major developed economies to stabilize their debt burdens. Benchmark 10-year government bond yields across the world's 10 largest developed economies have risen by an average of 81 basis points this year.

This trend is estimated to contribute to a nearly $4 trillion increase in overall developed-market government debt, pushing the total above $75 trillion. The United States is projected to run the largest general government budget deficit this year at 7.5% of GDP, or $2.4 trillion.

Fiscal challenges vary by nation. France requires a primary deficit cut to 0.4% of GDP to stabilize its debt, while Germany is expected to see the widest widening of deficits this year by 1.1 percentage points. Canada's deficit is expected to widen by 0.7 percentage points.

By 2030, debt-to-GDP ratios are forecast to rise most in France, the United States, and Germany. Japan remains an outlier, with its ratio expected to decrease by 11 percentage points to 185%.