Rating agency Fitch warned on Tuesday that rising government bond yields are making it more difficult for major advanced economies to stabilize their debt burdens, amid growing financial pressures on countries including France, the United States, and Britain.
In a report published on its official website, the agency stated that the 10-year government bond yields in the world's top 10 advanced economies have risen by an average of 81 basis points since the beginning of 2026. This contributes to an increase in total government debt in advanced economies by approximately $4 trillion, exceeding $75 trillion overall, or $68.5 trillion for the top 10 economies.
Fitch clarified that the average yield on 10-year bonds in the largest advanced economies is now 161 basis points higher than the average interest rate on existing debt, making it more difficult to reduce or even stabilize debt levels.
United States with the largest fiscal deficit
Fitch predicted that the United States will record the largest general budget deficit among advanced economies this year, at 7.5% of GDP, equivalent to $2.4 trillion. France follows with an expected deficit of 5.4% of GDP, then Britain at 4.8%, and Germany at 3.7%.
The fiscal deficit is expected to widen the most in Germany this year, by 1.1 percentage points, followed by the United States and Canada by 0.7 percentage points each. Conversely, Britain is expected to record the largest reduction in its deficit, by 0.4 percentage points.
France most affected
France is facing one of the most severe financial challenges, as it must reduce its primary deficit (excluding interest payments) to 0.4% of GDP, compared to current projections of 2.9% for this year, to stabilize its debt burden. Fitch added that rising actual borrowing costs to current market yield levels would require an additional fiscal adjustment in France equivalent to approximately 3.1% of GDP.
By 2030, Fitch expects France's debt-to-GDP ratio to rise by 12 percentage points, reaching 128%, which is the largest expected increase among the mentioned economies. The debt-to-GDP ratio is also expected to rise in the United States and Germany, while it is likely to fall in Japan by 11 percentage points, reaching 185%.
Fitch's estimates highlight the challenge governments face with rising borrowing costs, as debt servicing becomes more expensive and fiscal maneuvering space shrinks, particularly for countries with high deficits that require continuous financing to cover their obligations.
Source: Syrian Arab News Agency (SANA)
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