NEW YORK — Global debt climbed to a record $348 trillion at the end of 2025, the Institute of International Finance said. The trade group said governments drove more than $10 trillion of the annual increase, cementing sovereign borrowing as the main engine of the world’s debt buildup, Feb. 25, 2026.
The Institute of International Finance, a global financial industry association, published the figures in its latest Global Debt Monitor. The amounts are in U.S. dollars. The reading underscores how quickly global debt has grown even as private-sector borrowing cooled from pandemic peaks. In the report, covered by Reuters, the group said the world added nearly $29 trillion in new borrowing in 2025 — the fastest yearly buildup since the pandemic surge — with the United States, China and the euro area accounting for roughly three-quarters of the government-led jump.
Global debt surge led by sovereign borrowing
The data point to a cycle driven less by households and companies and more by persistent fiscal deficits. Government debt stood at about $106.7 trillion at year-end 2025, up from roughly $96.3 trillion a year earlier. Nonfinancial corporate debt rose to about $100.6 trillion, while household liabilities increased more moderately to about $64.6 trillion, the IIF said.
- Total debt: $348 trillion at the end of 2025.
- Debt added in 2025: nearly $29 trillion.
- Government debt: about $106.7 trillion.
- Debt-to-GDP ratio (global): about 308%.
- Debt-to-GDP ratio (emerging markets): above 235%, a record.
As a share of gross domestic product, the overall debt-to-GDP ratio edged lower in 2025, driven mainly by advanced economies, because growth kept pace with borrowing. In emerging markets, however, debt ratios continued to climb, leaving those economies more exposed to tighter financial conditions.
In mature markets, total debt climbed to roughly $231.7 trillion, while emerging markets reached about $116.6 trillion — both new highs. The IIF said January was among the busiest starts to a year on record for sovereign bond issuance as governments moved early to pre-fund budgets while demand held up.
The IIF said “easier financial conditions” can help mobilize capital for national priorities, including defense, and it pointed to a new wave of investment spending — from artificial intelligence-driven data centers to energy transition projects — as another factor supporting borrowing.
Why the record matters for markets in 2026
The immediate concern is not only the size of the debt pile, but the refinancing calendar. The IIF estimated emerging markets face more than $9 trillion in debt redemptions in 2026, while mature markets have over $20 trillion in maturing bonds and loans.
Those rollovers will arrive as growth stays steady but moderate. In its January 2026 World Economic Outlook update, the International Monetary Fund projected global growth of 3.3% in 2026 and 3.2% in 2027 and urged governments to rebuild fiscal buffers.
If borrowing continues to expand at anything close to the 2025 pace, the IIF warned that debt-to-GDP ratios could start climbing again — particularly in emerging markets, where higher interest costs and heavier reliance on external funding can amplify market stress.
Other institutions see a similar squeeze building in bond markets. The OECD’s Global Debt Report 2025 said sovereign and corporate bond borrowing totaled about $25 trillion in 2024 and projected OECD sovereign bond issuance would rise to a record $17 trillion in 2025.
UN Trade and Development has highlighted the social cost of debt service in developing countries. In a 2025 report, UNCTAD said global public debt reached $102 trillion in 2024 and noted that 3.4 billion people live in countries that spend more on interest than on health or education.
Debt has been climbing for years
The latest figures extend a run of record highs that took off during the pandemic and has not fully reversed. In September 2021, the IIF estimated global debt had risen to $296 trillion by the end of the second quarter, Reuters reported.
By early 2024, the trade group put global debt at $313 trillion for 2023, according to a Reuters report, as higher rates and lingering deficits pushed both mature and developing economies deeper into debt.
In mid-2025, global debt reached $337.7 trillion at the end of the second quarter, Reuters reported, before rising further into year-end as sovereign issuance stayed heavy.
Whether global debt keeps expanding at a similar clip in 2026 may hinge on fiscal choices — from defense and infrastructure spending to energy-security policies — and on how long investors remain willing to absorb record sovereign issuance without demanding sharply higher yields.
