Global debt surged to a record $348.3 trillion at the end of 2025, after nearly $29 trillion was added over the year, marking the fastest annual increase since the pandemic, according to the Institute of International Finance (IIF) report released on Wednesday.
The rise was largely driven by government borrowing, which accounted for more than $10 trillion of the increase. Almost three-quarters of this came from the United States, China, and the euro area, highlighting how fiscal deficits in major economies are shaping the global debt picture.
In simple terms, many governments borrowed heavily to fund spending, rather than relying on private or corporate debt.
Debt climbed across both advanced and emerging markets. Total debt in advanced economies reached $231.7 trillion, while emerging markets collectively hit $116.6 trillion.
Despite the record nominal level, the global debt-to-GDP ratio fell slightly to about 308%, mainly due to growth in advanced economies. Emerging markets, by contrast, saw debt ratios rise to a new record above 235%.
Sector-specific debt at the end of 2025 was:
Household and corporate debt ratios fell slightly, while public debt continued to expand. In emerging markets, the largest government borrowing increases were in China, Brazil, Mexico, Russia, and the euro area.
The IIF attributed the surge to:
“Easier financial conditions should support mobilisation of capital for national priorities, including defence and infrastructure,” the report said.
The global debt build-up increases exposure to interest rate shifts and investor sentiment. With public borrowing expected to remain strong in 2026, especially in the U.S., China, Germany, Japan, and India, debt levels are likely to stay near historic highs.
Emerging markets face a record $9 trillion in refinancing needs, while mature markets have more than $20 trillion in maturing bonds and loans. Continued borrowing at 2025’s pace could see debt-to-GDP ratios rise again, particularly in leveraged emerging economies.
The IMF projects global growth of 3.3% in 2026, with advanced economies at 1.8% and emerging markets just above 4%. While steady, this growth may not offset rising debt stocks.
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Tensions in the region remained high on Tuesday (10 March), as the United States and Iran exchanged increasingly sharp warnings, including threats over the strategic Strait of Hormuz, a critical artery for global oil supplies.
Iran and the U.S. exchanged threats on Tuesday, as U.S. Defense Secretary Pete Hegseth warned Tehran to expect the “most intense day" of attacks so far. Meanwhile, Iranian President Masoud Pezeshkian said “anyone who entertains the illusion of destroying Iran knows nothing of history."
The Strait of Hormuz has become a focal point of global concern as tensions rise following the conflict involving Iran, the United States and Israel. Tehran has threatened to block the strategic waterway, raising fears of disruption to global oil shipments and energy markets.
Reports of so-called “acid clouds” moving from Iran towards Central Asia are not supported by scientific data, national hydrometeorological services in Kazakhstan, Uzbekistan and Kyrgyzstan say, adding there is no threat to the region.
Tensions in the region remained high on Tuesday (10 March), as the United States and Iran exchanged increasingly sharp warnings, including threats over the strategic Strait of Hormuz, a critical artery for global oil supplies.
Global oil prices surpassed $119 a barrel on Monday (9 March, 2026), an almost four year high, as the Middle East conflict rumbled on.
China has urged Afghanistan and Pakistan to resolve their dispute through dialogue after Chinese envoy Yue Xiaoyong met Afghan Foreign Minister Amir Khan Muttaqi, as fighting between the two neighbours entered its eleventh day.
Entry and exit across the state border between Azerbaijan and Iran for all types of cargo vehicles, including those in transit, will resume on 9 March, according to a statement by the Cabinet of Ministers of Azerbaijan.
Iran named Mojtaba Khamenei to succeed his father Ali Khamenei as supreme leader on Monday (9 March), signaling that hardliners remain firmly in charge, as the week-old U.S.-Israeli war with Iran pushed oil above $100 a barrel.
China has raised the retail prices of petrol and diesel after global oil prices climbed sharply. The country’s top economic planning body, the National Development and Reform Commission (NDRC), announced the move after reviewing international oil market trends.
Global financial markets remained on edge on Friday as the escalating war involving the United States, Israel and Iran continued to rattle investors, fuelling volatility in stocks and sending energy prices sharply higher.
China’s top leadership has unveiled a new push to turn advanced technologies into large-scale industrial priorities as part of the country’s upcoming 15th Five-Year Plan, which will guide economic and social development from 2026 to 2030.
The European Commission sees no immediate impact on the European Union's security of oil supply from the escalating conflict in the Middle East, it said in an email to EU governments, seen by Reuters on Monday (2 March).
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