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Executive summary

The edition on a few pages: the abstract, the key messages, the headline finding and what each steward reads in it.

6 min read1 figure0 tables10 notesNR-SECTOR-FINANCE-GLOBAL-2026-BASELINE

Contents
  1. ·Edition home
  2. ·Executive summary
    1. S.1 Abstract
    2. S.2 Key messages
    3. S.3 Headline finding
    4. S.4 At a glance
    5. S.5 What each steward reads in it
    6. S.6 What this edition is, and is not
  3. 1Finance is where shocks are priced
  4. 2Key findings
  5. 3Systems and sectors at baseline
  6. 4Risks and capability
  7. 5Sovereign bond repricing under inflation and thin fiscal space
  8. 6Readings from the other desks
  9. 7The 2027 agenda
  10. 8Systems in depth
  11. AMethodology
  12. BData appendix
  13. CReferences and record
  14. ·Complete edition, for print

S.1Abstract

The world economy enters 2027 growing, repricing and indebted at the same time. World output grew 3.5% in 2025 on the IMF basis and 2.9% on the World Bank basis27. The Middle East conflict that began in early 2026 pushed energy prices and inflation up, and the BIS reports fertiliser prices up 50% and plastics up 30%1. Central banks have tightened again: the euro area deposit facility rate rose to 2.50% on 16 September 202619. Public debt is the common pressure. Advanced economies carry general government gross debt of 108.2% of GDP and emerging market and developing economies 73.7%2. Developing countries paid USD 995 billion in net interest in 2025, a median 8.1% of government revenue, and the interest bill now exceeds health or education spending in 51 of them10. Markets are changing shape. Non-bank financial institutions held 53% of advanced-economy sovereign debt in 2025, up from 44% in 2021, and hedge fund leverage stayed near record highs117. Long-term bond yields in France, Germany, Japan, the United Kingdom and the United States reached their highest levels in more than a decade after late September 20266. Foreign direct investment rose 6% to USD 1.6 trillion in 2025, driven by a few artificial intelligence megaprojects9. This baseline sets out what the evidence supports and where it is thin. It ranks no country and recommends no policy or investment.

S.2Key messages

Six readings that frame the finance and economy baseline, and the eight questions this edition answers, each with its status and source.

  1. World output grew 3.5% in 2025 on the IMF basis and 2.9% on the World Bank basis.27

    How fast is the economy growing?Reported

  2. Advanced economies carry 108.2% of GDP and emerging and developing economies 73.7%.2

    How heavy is public debt?Reported

  3. Developing countries paid USD 995 billion in net interest in 2025.10

    Who pays most to borrow?Reported

  4. Non-banks hold 53% of advanced-economy sovereign debt.1

    Who holds the debt?Reported

  5. It held 56.7% of allocated reserves in the second quarter of 2026.4

    Is the dollar still the anchor?Reported

  6. A few AI megaprojects drove global foreign direct investment to USD 1.6 trillion.9

    Where is investment going?Reported

  7. Food prices were 5.8% above a year earlier in September 2026.25

    Do prices reach households?Reported

  8. A repricing of sovereign bonds under inflation and thin fiscal space. SCN-GS05-SOV-01

    What will 2027 test first?Expert input

S.3Headline finding

ReportedEQL 4NRF-SECTOR-FINANCE-GLOBAL-2026-BASELINE-FIN-003

In 2025, developing countries paid USD 995 billion in net interest on USD 35 trillion of public debt, a median 8.1% of government revenue.

Figure S.1Interest paid and interest saved, developing countries (USD billion)
ItemBar, scaled to the largest valueValue
Net interest on public debt, 2025995
Annual saving at developed-country borrowing costs500

Source: UNCTAD, A World of Debt 202610.

The interest bill is now large enough to compete with services. UNCTAD counts 51 developing countries that spend more on interest than on either education or health, and 3.7 billion people living in them, 1.2 billion more than in 201010. The pressure is also the product of supply: bilateral lenders have diverted assistance and private creditors have become more risk averse, so developing countries borrow more at home10.

S.4At a glance

3.5%

growth in world output, 20252

108.2% of GDP

advanced-economy debt, 20252

995USD billion

developing-country net interest, 202510

53%

non-bank share of advanced-economy sovereign debt, 20251

56.7%

US dollar share of allocated reserves, 2026 Q24

1.6USD trillion

foreign direct investment, 20259

S.5What each steward reads in it

GCRI · KEY T

Technical Truth

The evidence supports reading finance as the pricing layer of the WEFH+B system.

GRF · KEY M

Public Meaning

For most people finance arrives as a price, a rate or a cut in a service.

GRA · KEY F

Capital Meaning

Readiness implications only. Borrowing costs are high, official assistance fell and the financing gap is estimated at USD 4 trillion.

NEXUS

Synthesis

The system is well measured at the level of aggregates and thinly measured at the level of non-bank links, private credit and protection gaps.

S.6What this edition is, and is not

What this edition is

A baseline: the 2026 state of the world’s financial and economic system and the couplings through which it carries risk into other systems. It synthesises published evidence and ranks no country, company or asset.

What it is not

Not a ranking of economies, a forecast of markets, an investment recommendation or an assessment of any central bank, regulator, lender, fund or government. Monetary, fiscal and prudential decisions rest with national authorities and the institutions that hold the mandates.

What comes next

National, regional and sector evidence feeds the 2027 finance and economy edition through the federation. Each edition reports what changed against this baseline: observations, source revisions, method changes, scenario updates and corrections.

Notes

Numbers are the edition’s reference numbers, so a note reads the same in every chapter. The full list, with every source and its licence, is in Annex C. Annex C, references

  1. 2DATA VINTAGE AFTER CLOSE: International Monetary Fund (ed.), World Economic Outlook database, current vintage with a publication date of 13 October 2026 (world, advanced economy and emerging market and developing economy aggregates and selected country series), retrieved through the IMF data service; released after the 30 September evidence close and cited as the position at access. IMF, Washington. Observation year 2025 (estimates, with projections to 2027). Accessed 2026-11-03.back
  2. 7DATA VINTAGE AFTER CLOSE: World Bank (ed.), World Development Indicators database, last updated 8 October 2026 (world and income-group series for output growth, consumer prices, remittances, external debt stocks and service, retrieved through the World Bank data service). World Bank, Washington. Observation year 2025 (2024 for external debt). Accessed 2026-11-03.back
  3. 1Bank for International Settlements (ed.), Annual Economic Report 2026: From resilience to robustness? (chapters I to III), Basel, 28 June 2026. BIS, Basel. Observation year 2025 (with events of early 2026). Accessed 2026-11-03.back
  4. 19European Central Bank (ed.), ECB Data Portal, key interest rates (deposit facility rate and main refinancing operations rate, dates of change to 16 September 2026; harmonised index series), retrieved through the ECB data service. ECB, Frankfurt. Observation year 2026. Accessed 2026-11-03.back
  5. 10UNCTAD (ed.), A World of Debt 2026: Rising debt costs and stalling development (report page with key statistics; the full report and data file were not opened). United Nations Trade and Development, Geneva. Observation year 2025 (regional shares 2023; the year of the 51-country and 3.7 billion people counts is not stated on the page). Accessed 2026-11-03.back
  6. 17Board of Governors of the Federal Reserve System (ed.), Financial Stability Report, May 2026 (overview and leverage sections; data as of 23 April 2026). Federal Reserve Board, Washington. Observation year 2025 (fourth-quarter data). Accessed 2026-11-03.back
  7. 6POST-CLOSE, context only: World Bank (ed.), Global Monthly, October 2026 (global financial conditions, commodity and activity notes; data to 23 October 2026); released after the 30 September evidence close and cited as the position at access. World Bank, Washington. Observation year 2026. Accessed 2026-11-03.back
  8. 9UNCTAD (ed.), World Investment Report 2026: overview (PDF, 7 July 2026). United Nations Trade and Development, Geneva. Observation year 2025. Accessed 2026-11-03.back
  9. 4International Monetary Fund (ed.), Currency Composition of Official Foreign Exchange Reserves (COFER), quarterly series to the second quarter of 2026, retrieved through the IMF data service. IMF, Washington. Observation year 2026 (second quarter). Accessed 2026-11-03.back
  10. 25Food and Agriculture Organization of the United Nations (ed.), FAO Food Price Index, release for September 2026. FAO, Rome. Observation year 2026. Accessed 2026-11-03.back

Cite this summary

Valadbaygi, S. (Ed.). (2026). Executive summary: Executive summary. In Global Finance and Economy Risk and Resilience Report 2026: Baseline Edition, The State of the World’s Financial and Economic System. (Baseline Edition 2026, Report No. NR-SECTOR-FINANCE-GLOBAL-2026-BASELINE) [Draft under review]. The Global Centre for Risk and Innovation (GCRI).

Every citation form of the whole report, BibTeX and RIS included, is on the edition home. Cite this report

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