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Global debt surged by approximately $7.5 trillion in the first quarter of 2025, reaching a historic high of over $324 trillion, according to data from the Institute of International Finance (IIF). The spike, driven primarily by China, France, and Germany, marks an increase nearly four times the average quarterly growth seen since late 2022.
Although the depreciation of the U.S. dollar played a role in raising the debt's value in dollar terms, the scale of this increase was exceptional. While the overall global debt-to-GDP ratio remains slightly above 325%, emerging markets saw their ratio hit a record 245%.
In these regions, debt grew by more than $3.5 trillion to surpass $106 trillion, with China alone accounting for over $2 trillion. The country's government debt-to-GDP now stands at 93% and is projected to reach 100% by year-end.
Notably, Brazil, India, and Poland also experienced significant debt increases, contributing to a new nominal high in emerging market debt excluding China. However, the debt-to-GDP ratio in these countries dropped below 180%, down from earlier peaks.
One critical point raised in the report is the upcoming challenge of debt repayments. Emerging markets are expected to face $7 trillion in bond and loan redemptions through the rest of 2025. For developed economies, the figure is even higher, nearing $19 trillion.
The report also highlights rising concern over the U.S. fiscal outlook. Large financing needs—partly due to tax cuts—could lead to a sharp increase in Treasury supply, potentially driving up yields and inflating government interest expenses. The IIF warns that continued uncertainty, especially surrounding U.S. trade policy, could hamper economic growth and possibly reduce government revenues if global retaliation follows the implementation of new tariffs.
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