Global debt hit a new record last year, climbing to $348 trillion. It was the fastest jump we’ve seen since the COVID-19 pandemic, as governments around the world kept borrowing heavily.
The biggest increases came from the United States, China, and countries across Europe, where governments raised spending and took on more debt.
A new report from the Institute of International Finance (IIF) said total global debt — including government and corporate borrowing — rose by $29 trillion in 2025 alone.
In emerging markets, debt reached $117 trillion. That pushed their debt-to-GDP ratio to a record level of more than 235%. In simple terms, many of these countries now owe more than twice the size of their economies.
Experts at the IIF said governments are borrowing more to fund key priorities. These include defense spending and big investments in artificial intelligence. But this trend also brings risks, especially with unstable global liquidity and refinancing needs in developing countries now exceeding $9 trillion.
The report also addressed concerns about the US financial system. It said foreign demand for US Treasury bonds remains strong. That pushes back against claims that global investors are pulling money out of the United States or moving away from the US dollar — at least for now.
