AI Boom To Drive Global Bond Yields? DEA Secy Anuradha Thakur On The Changing Capital Landscape

Department of Economic Affairs Secretary Anuradha Thakur highlighted how the global capital landscape is undergoing a major shift, with bond markets assuming a growing role in the financial system. She noted that government bonds now account for more than 80% of global GDP, while rising borrowing, inflation concerns and fiscal uncertainty are pushing up long-term yields and term premia. Thakur also pointed to growing global imbalances and their impact on the cost of capital. Importantly, she said the massive AI investment cycle is adding another dimension, as data centres, semiconductors, electricity and transmission infrastructure require significant capital and are increasingly being financed through debt.