The Institute of International Finance has released its latest Global Debt Monitor, reporting that global debt rose by US$1.3 trillion in the March 2024 quarter to a new record high of US$315 trillion.
The IIF said that after three quarters of declining global debt-to-GDP, the ratio rose in the March quarter. It is now 333 per cent of global GDP.
The increase was primarily driven by emerging markets, with the biggest increases in China, India and Mexico.
Debt levels in mature markets were stable. A reduction in household and non-financial corporate debt offset continuing growth in government and financial sector debt. The biggest increases were in the United States and Japan.
The IIF said the immediate risk posed by the increase in debt is that stubborn inflation, particularly in the US, is keeping pressure on funding costs.
“Government budget deficits are still higher than pre-pandemic levels and are projected to contribute around US$5.3 trillion to global debt accumulation this year,” the report said.
Japan stands out as one of the most heavily indebted countries, with total debt hovering around 600 per cent of GDP. Growth in Japanese debt has been the largest among mature markets since the pre-COVID period.