A new report from the United Nations University Institute for Water, Environment and Health has warned that the global water crisis has escalated into what experts describe as “water bankruptcy”, with freshwater systems sustaining billions of people suffering potentially irreversible damage.
The report highlights growing pressure on water supplies worldwide, with major cities including Cape Town, São Paulo and Tehran already experiencing severe shortages and, at times, coming dangerously close to so-called “Day Zero” scenarios where municipal taps run dry.
Researchers found that agriculture accounts for about 70 percent of global freshwater use, while nearly a third of the world’s staple crops are produced in regions already under significant water stress.
Kaveh Madani, director of the institute, said global water systems are approaching a tipping point.
“For much of the world, ‘normal’ is gone,” he said, warning that shortages, droughts and deficits are becoming chronic rather than temporary setbacks.
According to the report, more than half of the world’s large lakes have shrunk since the early 1990s, and around 35 percent of natural wetlands have disappeared since 1970. “What we are seeing is no longer recovery. The stage of crisis has passed. We are now seeing failure and water bankruptcy,” Madani added.
Nearly three-quarters of the global population now lives in water-insecure areas, with about four billion people facing severe water scarcity for at least one month each year. Annual economic losses linked to drought are estimated at $307 billion.
The report notes that climate change, ageing infrastructure and rapid urbanisation are compounding the strain on already fragile systems. It calls for urgent reforms to development planning, investment in resilient infrastructure, and stronger protections for vulnerable communities.
In short, the tap isn’t just dripping it’s flashing red.