Global debt hits $305 trillion in first quarter

Global debt increased by $8.3 trillion compared to the previous quarter and reached $305 trillion as of the end of the first quarter. While debt in emerging markets exceeded $100 trillion, reaching an all-time high, 75 percent of countries in this class saw an increase in debt. The Institute of International Finance (IIF) published the "Global Debt Monitor" report. According to the report, while central banks responded to market vulnerabilities by slowing the pace of interest rate hikes, global debt increased by $8.3 trillion compared to the end of 2022, reaching $305 trillion as of the end of the first quarter. When we look at the distribution of debt, household debt was $57.6 trillion as of the end of the first quarter, debt to non-financial corporations was $91.9 trillion, debt to public corporations was $85.7 trillion, and debt to financial corporations such as banks was $69.8 trillion. Debt in emerging markets exceeded $100 trillion in the first quarter of the year, reaching an all-time high, while 75 percent of countries in this class saw their debt increase. The total debt of advanced economies was calculated as $204.2 trillion at the end of the first quarter. Debt-to-GDP ratio was approximately 335 percent The global debt-to-GDP ratio stabilized at close to 335 percent by the end of the first quarter. When considered as a ratio to total GDP, household debt decreased from 62.5 percent to 62 percent, public debt from 96 percent to 95.5 percent, debt to financial companies from 79.6 percent to 79.5 percent, and debt to non-financial companies increased from 95.9 percent to 96.3 percent in the first quarter. The total debt ratio of emerging markets was 250 percent in the first quarter, while the debt ratio of advanced economies was calculated as 383.2 percent. Global debt expected to rise Global debt, which totals $305 trillion, is $45 trillion higher than its pre-pandemic level, is expected to continue to rise rapidly. Factors including aging populations, rising healthcare costs and significant climate finance gaps continue to put pressure on government balance sheets, while rising geopolitical tensions are also expected to lead to further increases in national defense spending in the medium term. This is expected to have significant impacts on international debt markets, especially if interest rates remain high for longer.