Global debt climbed to a record $346 trillion in the third quarter of the year, reaching 310% of global GDP, according to the Institute of International Finance (IIF), as rising public borrowing and higher interest costs pressure government finances worldwide.
Advanced economies accounted for most of the increase, with total debt rising to $230.6 trillion, while emerging markets’ debt reached $115.1 trillion. Debt growth remained concentrated in the United States and China, with easing monetary conditions in major economies accelerating borrowing.
The IIF warned that financing needs in many advanced economies remain well above pre-pandemic levels, with fiscal pressures intensifying due to higher interest expenses, aging populations, rising defense and healthcare spending, and climate related costs factors that are pushing longterm borrowing costs higher.
The United States remains the world’s most indebted country with around $101 trillion in total debt, followed by China ($64.2 trillion) and Japan ($24.5 trillion). Major European economies including the UK, France and Germany are also among the top borrowers.
In developing economies, debt servicing burdens are growing. Net interest payments reached nearly $1 trillion last year, while low and middle income countries’ external debt rose to a record $8.9 trillion, according to the World Bank.
