Global debt in Q1 of this year surpassed 324 trillion dollars...Record high
World Debt Hits All-Time High Amid Dollar Weakness and Surge in Non-Dollar Debt (Source: Newsis)
As of the end of March 2025, the total global debt reached 324 trillion dollars. This is a record high on a quarterly basis. On the 7th, US News reported that global debt increased by 7.5 trillion dollars only in the past first quarter, citing the latest statistics from the International Institute of Finance (IIF).
The IIF pointed to the dollar weakness as the background for this surge. As the value of the dollar decreased in the foreign exchange market, debt denominated in non-dollar currencies surged in terms of conversion, which was analyzed as a major cause of the debt expansion. In fact, the increase in debt in the first quarter exceeds four times the average quarterly increase in recent years.
This change was largely attributed to the debt expansion in major countries like China, France, and Germany. On the other hand, Canada, the United Arab Emirates, and Turkiye reportedly reduced their debt scale. The ratio of debt to global gross domestic product (GDP) showed a gentle downward trend and is currently about 325%.
In emerging countries, the debt exceeded an all-time high of 106 trillion dollars, reaching 245% of GDP. Among them, China alone added over 2 trillion dollars of debt in a single quarter, increasing the debt-to-GDP ratio to 93%, and it is expected to reach 100% by the end of the year. Even in emerging countries excluding China, the absolute scale of debt is at the highest level but somewhat lower than before in terms of GDP, being under 180%.
One of the key variables in the global financial market in the second half of the year is the repayment of bonds and borrowings. By the end of the year, emerging countries bear a repayment burden of about 7 trillion dollars, while advanced countries are close to 19 trillion dollars.
Amid this, President Donald Trump's high tariff policy is increasing uncertainty in the global trade environment, raising volatility in the financial market. However, there is also an analysis that the dollar weakness is acting as a partial buffer for emerging countries.
The IIF warned that if the high tariff stance of the Trump Administration is prolonged, countries highly dependent on trade with the United States will have no choice but to increase fiscal expenditures. In addition, "With the tax cut policy, the demand for debt financing in the United States is rapidly expanding, putting pressure on government bond yields, and this could heighten the risk of inflation," it forecasted.