According to the latest report from the Institute of International Finance (IIF), global debt has reached a record high, rising by about $7.5 trillion to a total of over $324 trillion in the first quarter of 2025. This is a significant increase from previous years.
Top Contributors to Debt Increase
The countries contributing most to this rise in global debt include China, France, and Germany. These nations have seen a substantial increase in their debt levels, which has added to the overall global debt surge.
Countries Seeing Debt Declines
On the other hand, some countries have managed to reduce their debt. Canada, the UAE, and Turkey are among the countries where debt levels have declined, providing a contrast to the global debt increase.
Emerging Markets’ Debt-to-GDP Ratio at Record High
Emerging markets, which include many developing economies, have also seen a sharp rise in their debt levels. The debt-to-GDP ratio (the total debt relative to the size of the economy) for emerging markets has hit a record high of 245% in Q1 2025. This suggests that these countries’ debt is growing faster than their economies.
Key Takeaways:
1. Global debt rose by $7.5 trillion in one quarter—far above the $1.7 trillion average since late 2022.
2. China, France, and Germany are the biggest contributors to the rise in global debt.
3. China’s government debt-to-GDP ratio has reached 93% and may hit 100% by year-end.
4. Canada, UAE, and Turkey have reduced their debt.
5. Emerging market debt reached a record high of $106 trillion.
6. Emerging markets’ debt-to-GDP ratio has reached 245%, the highest on record.
7. China contributed over $2 trillion to the quarterly rise in emerging market debt.
8. The global debt-to-GDP ratio remains above 325%, despite a slight decline.
The increase in global debt poses concerns for economic stability, and the situation in emerging markets is particularly worrisome, as their debt grows faster than their economic output.
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