What does it mean that Global Corporate Debt is 98.5% of the Global World Product?

Question

Is this just a comparison? Or does this have a larger meaning?

In: 1

Answer 1

It means that overall, companies are very indebted right now. The risk is that in a rising interest rate environment, which we are entering, that the debt will become more expensive to service over time as it is refinanced. For more indebted companies, that will hurt margins and therefore profits.