Global debt has climbed to a record high of nearly $353 trillion by the end of March, according to a report from the Institute of International Finance (IIF), as investors increasingly shift away from US Treasury markets.
The report notes a growing diversification trend, with international investors moving capital into Japanese and European bonds amid changing sentiment toward US debt.
Speaking in a webinar, IIF director Emre Tiftik said the trend reflects a broader effort among investors to reduce exposure to US Treasuries. He added that while there is no immediate risk to the roughly $30 trillion US Treasury market, long-term debt dynamics appear increasingly unsustainable.
According to the report, eurozone and Japanese debt ratios have edged lower, while US debt-to-GDP continues to rise under current policy conditions.
Global borrowing increased by more than $4.4 trillion in the first quarter alone, marking the fastest rise since mid-2025. The increase was driven largely by US government borrowing, alongside a sharp rise in Chinese corporate debt.
Emerging markets, excluding China, also saw debt climb to a record $36.8 trillion, driven mainly by government financing pressures. Meanwhile, most mature markets recorded slight declines, with global debt-to-GDP holding steady at around 305%.
The IIF warned that long-term structural pressures — including ageing populations, defence spending, energy security, cybersecurity, and AI investment — are likely to push debt levels higher. It also noted that geopolitical tensions, including conflicts in the Middle East, could add further strain to the global fiscal outlook.
