Global debt surged by nearly $29 trillion in 2025, reaching a record high of $348.3 trillion, according to the latest Global Debt Monitor report released by the Institute of International Finance (IIF).

The report indicated that the pace of debt accumulation accelerated sharply last year, marking the fastest increase since the pandemic period. The rise reflects expanding fiscal deficits, elevated borrowing costs, and continued government spending across major economies.

Approximately two-thirds of the increase originated from advanced economies, where higher public spending and budget deficits drove borrowing levels upward. Total debt in advanced markets climbed to $231.7 trillion in the fourth quarter of 2025, while debt in emerging markets reached $116.6 trillion, both marking new historical peaks.

Debt-to-GDP ratio declines globally, rises in emerging markets

Despite the record nominal increase, the global debt-to-GDP ratio declined for the fifth consecutive year, falling to around 308 percent in 2025. The decrease was largely attributed to advanced economies, where nominal GDP growth helped stabilize debt burdens.

In contrast, emerging markets experienced a rise in their debt-to-GDP ratio, which exceeded 235 percent — the highest level on record. Analysts note that higher borrowing costs, currency pressures and structural fiscal imbalances continue to weigh on developing economies.

Public borrowing leads the surge

In sectoral terms, household debt rose to $64.6 trillion in the fourth quarter of 2025, while non-financial corporate debt reached $100.6 trillion. Government debt climbed to $106.7 trillion, accounting for more than $10 trillion of the overall annual increase. Financial sector debt stood at $76.4 trillion.

According to international financial data cited in global media coverage, nearly three-quarters of the total debt increase came from China, the United States and the Euro Area, underlining the concentration of global borrowing among the world’s largest economies.

In Europe, public debt expansion was particularly pronounced in France and Italy, followed by Germany. Among emerging markets, Brazil, Mexico and Russia recorded notable increases in government borrowing.

Türkiye’s debt indicators

Data for Türkiye showed mixed trends. As of the final quarter of 2025, household debt-to-GDP edged up from 9.9 percent to 10.1 percent, while non-financial corporate debt rose from 37.3 percent to 38.2 percent. Public debt declined slightly from 27.5 percent to 26.8 percent, and financial sector debt eased from 17.5 percent to 17.3 percent.

The IIF report underscores that while global debt burdens remain historically high, the composition and sustainability of debt differ significantly between advanced and emerging economies. Analysts warn that prolonged fiscal imbalances and elevated interest rates could pose risks to financial stability if growth momentum weakens in the coming years.(ILKHA)