Global debt rose to a record $353tn by the end of March 2026, according to the Institute of International Finance (IIF), as borrowing continued to climb across major economies despite elevated interest rates.
The latest Global Debt Monitor, titled “Storm Clouds: Debt Markets on a Precipice,” showed an increase of more than $4.4tn in the first quarter alone, marking the strongest quarterly rise since mid 2025.
The surge follows a record $348tn at the end of 2025, when global debt expanded by about $29tn over the year.
The IIF said the global debt to GDP ratio remained broadly stable at around 305 percent, noting that nominal debt growth continued to be offset by economic expansion in several regions.
The increase in early 2026 was driven mainly by higher government borrowing in the United States and a sharp rise in non financial corporate debt in China, particularly among state owned enterprises. Emerging markets excluding China saw debt rise to a record $36.8tn, led primarily by sovereign borrowing, while debt levels in most other advanced economies were broadly steady.
The report highlighted growing divergence in global debt markets, with corporate credit showing resilience, supported in part by artificial intelligence related issuance, while government bond markets faced renewed pressure from sustained fiscal expansion and higher refinancing needs.
It also pointed to early signs of diversification in sovereign bond demand, with stronger interest in European and Japanese government debt compared with relatively stable demand for U.S. Treasuries.
The IIF warned that structural pressures are likely to sustain elevated borrowing levels. These include aging populations, rising defence and security spending, energy transition financing, cybersecurity requirements, and continued investment in artificial intelligence.
The report also flagged geopolitical tensions and inflation uncertainty as additional risks that could amplify vulnerabilities if global growth slows or financial conditions tighten unexpectedly.
Emre Tiftik of the IIF said diverging debt trajectories across regions are increasingly shaping investor behavior and could influence long term funding conditions.
Analysts said markets have so far absorbed rising issuance, but warned that refinancing risks in emerging markets remain a key vulnerability heading into 2026.
The IIF added that while financial markets remain broadly stable, the rapid pace of global debt accumulation raises concerns about long term fiscal sustainability if growth underperforms expectations.
