Global debt climbed to a record of more than $365 trillion in the first half of 2026, according to the Institute of International Finance (IIF), a banking trade group. Its latest Global Debt Monitor, published
Wednesday, shows the world added more than $10 trillion of new debt in just six months. It is the sixth straight quarterly increase.
The figure covers all four main types of borrowers: governments, households, banks and other financial firms, and non-financial companies, across more than 100 economies.
Slower Growth, but Still Growing
The good news is that the pace has slowed. The $10 trillion rise is less than half of the $21 trillion added in the same period last year. The IIF said higher interest rates, bigger debt-service bills, surging energy prices and the war with Iran all held borrowing back. Households and financial firms, the groups most sensitive to interest rates, slowed the most.
Governments and companies did not. Both sectors hit fresh record highs, and overall debt growth stayed above its five-year average.
China and the US Lead the Way
China alone added more than $4.8 trillion, taking its total debt to about $72.5 trillion, according to calculations based on IIF data. Falling land-sale income and a long property slump have squeezed local governments, while many companies face thin profit margins amid weak demand at home.
In the US, total debt rose $3.5 trillion to $111.8 trillion, driven mostly by the government and the financial sector. Federal debt reached 122.3% of GDP in the second quarter, and the Treasury Department said federal debt passed $40 trillion for the first time in August.
Emerging markets as a group hit record debt of more than 235% of GDP, with South Africa, Argentina and Egypt among the heavier borrowers.
Key Data
| Measure | Latest Figure |
|---|---|
| Total global debt (H1 2026) | More than $365 trillion |
| Added in H1 2026 | More than $10 trillion (vs $21 trillion in H1 2025) |
| China: added / total | $4.8 trillion / $72.5 trillion |
| US: added / total | $3.5 trillion / $111.8 trillion |
| US federal debt to GDP (Q2) | 122.3% |
| Emerging-market debt to GDP | Above 235% (record) |
| Global debt to GDP | Above 305% |
A Debt Wave Without a Crisis
What makes this cycle different is its cause. Past debt surges followed shocks like the 2008 financial crisis and the Covid-19 pandemic. Emre Tiftik, the IIF’s director of global markets and policy, said there is no specific crisis this time. Instead, he pointed to a spending “super-cycle” in healthcare, energy, technology and defence.
Because that spending is long-term rather than a one-off, Tiftik said, “debt is here to stay.”
Borrowing is also getting more expensive. Average government borrowing costs across the G7 are at their highest since mid-2008, according to IIF data cited by Forbes. Long-term US Treasury yields have climbed to levels not seen since 2007.
The Refinancing Wall
A large amount of old debt now needs to be replaced. Emerging markets face more than $9 trillion of debt coming due, while mature markets must refinance more than $20 trillion. Many borrowers who locked in cheap loans during the pandemic now face rates that are roughly double.
So far, markets have handled this calmly. Demand for bonds remains strong, and the extra yield investors ask for on corporate debt is near 20-year lows. The IIF noted U.S. securities stayed in demand partly because no other market offers the same size and ease of trading.
Still, foreign governments trimmed their Treasury holdings for a second month in July, with Japan and China both selling. The IIF said the key question is what could trigger a turning point in demand for the dollar.
What It Means for Markets Over the Longer Term
Bonds: More government borrowing means more bonds for investors to absorb. That keeps upward pressure on long-term yields, the story behind this year’s selloff at the long end of the curve. For futures traders, that points to Treasury bond (ZB) and note (ZN) futures staying sensitive to supply and deficit headlines, not just Fed decisions.
The dollar: Right now, high U.S. rates keep the dollar in demand. But the IIF’s warning is a longer-term one: if rising interest bills make investors question U.S. finances, dollar demand could shift more quickly than expected.
Gold: A world carrying record debt is one reason central banks and investors keep buying gold as a store of value. In the short run, though, high yields and a strong dollar remain a headwind.
Risk assets: Calm markets depend on growth holding up. With credit spreads this tight there is little room for error, so a growth scare or a sharp move in rates could spread quickly across stocks, credit and banks.
