Global Debt Hits Record $365 Trillion After $10 Trillion Surge in H1 2026, IIF Reports

Global debt surged by $10 trillion in the first half of 2026 to a new record of over $365 trillion, with emerging markets accounting for the majority of the increase, according to a new report from the Institute of International Finance (IIF).

The pace of accumulation, however, has slowed significantly, coming in at less than half the $21 trillion added during the same period in 2025, the IIF noted in its latest Global Debt Monitor released Wednesday.

Emerging Markets Drive Debt Growth

Emerging markets were the primary engine of this growth, adding $6.5 trillion to their debt pile, which now exceeds $110 trillion. The report identified China as leading this increase, while debt accumulation in advanced economies decelerated.

The IIF attributed the overall slower borrowing activity to a confluence of factors, including higher global interest rates, rising debt-servicing costs, elevated energy prices, and geopolitical tensions. Governments and non-financial corporations accounted for most of the increase, with both sectors reaching new record debt levels.

Debt Ratio Declines on Inflation, Not Deleveraging

Despite the record-high nominal debt figure, the global debt-to-GDP ratio stood at approximately 310%. This is about 25 percentage points below the peak reached in early 2021.

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However, the IIF cautioned that this decline is largely an effect of high inflation boosting nominal GDP figures, rather than a sign of genuine deleveraging or debt reduction by borrowers. This indicates that the underlying debt burden remains substantial even as the ratio improves on paper.

Soaring Interest Costs Squeeze Budgets

The growing debt pile coincides with a sharp increase in borrowing costs. In the U.S., benchmark 10-year Treasury yields have climbed to their highest level since 2007, while 30-year yields have hit levels not seen in nearly two decades, raising refinancing costs for public and private sector entities.

According to the IIF, this environment has pushed annual interest expenses for Group of Seven (G7) economies up by nearly 85%. The report highlighted that advanced economies paid more than $3.3 trillion in interest on internationally traded government bonds over the past year, a figure that exceeds estimated global spending on:

• Defense ($3.1 trillion)
• Artificial intelligence ($2.6 trillion)
• Clean energy ($2.3 trillion)