Global debt climbed to a record level of nearly $353 trillion by the end of March 2026, according to the latest Global Debt Monitor report released by the Institute of International Finance (IIF). The report showed that global borrowing increased by about $4.4 trillion during the first quarter of the year, marking the fastest quarterly rise since mid 2025. It was also the fifth straight quarter in which debt levels continued to rise worldwide.
The United States and China were the biggest contributors to the jump in global debt. In the US, the increase was mainly driven by heavy government borrowing as fiscal spending remained high. The report warned that America’s debt situation could become difficult to sustain over the long term if current spending and borrowing trends continue.
The IIF said the US debt to GDP ratio is expected to keep rising under existing policies. Although the US Treasury market, which is worth around $30 trillion, is not facing any immediate danger, analysts believe investors are slowly becoming more cautious about relying too heavily on American government debt.
At the same time, investors are showing growing interest in government bonds from Japan and Europe. The report highlighted stronger international demand for Japanese and European debt markets compared with mostly stable demand for US Treasuries since the beginning of 2026. This suggests that some investors are gradually diversifying away from US assets.
China also saw a major increase in borrowing during the quarter. The report noted that Chinese non financial companies, especially state owned enterprises, sharply increased debt levels at the start of the year. Their borrowing growth significantly outpaced borrowing by the Chinese government itself.
Outside the world’s two largest economies, debt trends were more moderate. Debt levels in developed markets slightly declined overall, while emerging markets excluding China recorded a small increase. Debt in these emerging economies reached a new record of about $36.8 trillion, mainly because governments borrowed more to support spending and economic growth.
Globally, debt stood at around 305% of world economic output, a level that has remained broadly stable since 2023. However, the pattern differed across regions. Debt ratios have been gradually falling in many advanced economies, while they continue to rise steadily in emerging markets.
The countries that recorded the biggest increases in debt compared to GDP included Norway, Kuwait, China, Bahrain and Saudi Arabia. Each of these countries saw debt levels rise by more than 30 percentage points of GDP over the period covered in the report.
The IIF said several long term pressures are likely to keep pushing debt levels higher in the coming years. These include aging populations, rising defense spending, energy security investments, cybersecurity costs and large AI related capital expenditures. The report also noted that recent tensions and conflicts in the Middle East could add further pressure on governments and companies to increase borrowing.
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