Introduction to Global Debt Trends
The global debt has reached an unprecedented peak of nearly $338 trillion at the end of Q2 2025, driven by easing global financial conditions, a weakened US dollar, and more accommodative stances from major central banks, according to a quarterly report released by the Institute of International Finance (IIF).
Key Findings from the IIF Report
- Record-breaking Debt Levels: The global debt surged by over $21 trillion in H1 2025, reaching $337.7 trillion by the end of Q2.
- Top Debt Increases: China, France, the United States, Germany, the United Kingdom, and Japan experienced significant increases in debt levels, partly due to the US dollar’s depreciation against their major trading partners.
- Debt-to-GDP Ratio: Canada, China, Saudi Arabia, and Poland saw the most substantial increases in their debt-to-GDP ratios. Meanwhile, Ireland, Japan, and Norway experienced decreases.
- Global Debt-to-GDP Ratio: The global debt-to-GDP ratio continued to decline slightly, standing at just over 324%. However, in emerging markets, it reached a new high of 242.4% following a downward revision in the May report.
Emerging Markets Debt Trends
The total debt in emerging markets increased by $3.4 trillion in Q2, reaching a record high of over $109 trillion. Emerging markets face a record-breaking $3.2 trillion in bond and loan repayments for the remainder of 2025, according to the IIF.
The report also highlighted concerns about US debt, noting that short-term liabilities now account for around 20% of total public debt and nearly 80% of Treasury issuance.
Key Questions and Answers
- What is the current state of global debt? Global debt has reached a record high of nearly $338 trillion, driven by easing financial conditions, a weakened US dollar, and accommodative central bank policies.
- Which countries experienced the most significant debt increases? China, France, the United States, Germany, the United Kingdom, and Japan saw substantial debt growth, partly due to US dollar depreciation.
- How has the debt-to-GDP ratio changed globally and in emerging markets? The global debt-to-GDP ratio declined slightly to just over 324%, while emerging markets’ debt-to-GDP ratio reached a new high of 242.4%.
- What are the concerns regarding US debt? The report highlights worries about the growing short-term liabilities, which now represent around 20% of total public debt and nearly 80% of Treasury issuance.
