Global Debt Hits Historic High Amid Easing Financial Conditions

Global debt has surged to an unprecedented $337.7 trillion by the end of the second quarter, as stated in a new report released Thursday. This increase is largely due to relaxed global financial conditions, a weakened U.S. dollar, and more accommodating policies from central banks.

The Institute of International Finance (IIF), a prominent trade group, reported that global debt increased by more than $21 trillion in the first half of the year. Significant debt growth was observed in major countries such as China, the United States, and France, partly attributed to the declining value of the U.S. dollar, which has weakened by 9.75% against key trading partners since January.

Emerging market debt has also reached new heights, rising by $3.4 trillion in the second quarter to over $109 trillion. The IIF warned of upcoming fiscal pressures, highlighting nearly $3.2 trillion in bond and loan redemptions expected by the end of 2025, and noted a growing dependency on short-term government borrowing in mature markets, particularly the U.S., potentially impacting central bank policies.

(With inputs from agencies.)