Global debt surpassed $365 trillion in the first half of 2026, rising by more than $10 trillion in just six months.
According to the latest Global Debt Monitor from the Institute of International Finance (IIF), emerging economies accounted for much of the rise that was less than half the $21 trillion increase recorded during the first half of 2025.
The IIF attributed the slower increase to higher interest rates, increased costs of borrowing, rising energy prices and the US-Iran conflict, which have added pressure on governments and businesses.
Debt in emerging markets increased by $6.5 trillion during the first six months of the year, taking their combined debt above $110 trillion.
China recorded the largest increase in borrowing among emerging economies, according to the report.
The IIF said governments and non-financial companies accounted for most of the overall increase, with borrowing by both groups reaching record levels.
Despite the rise, global debt was equivalent to about 310 percent of the world’s total economic output, known as the debt-to-GDP ratio.
This was about 25 percentage points below its peak in early 2021.
However, the IIF said the lower ratio did not necessarily mean countries had reduced their debt.
Instead, higher inflation had increased the value of economic output when measured in current prices, making the debt burden appear smaller relative to GDP.
The report also highlighted financial pressures facing major advanced economies, including the United States (US), France, Britain and Japan, where governments continue to run large budget deficits and face higher interest costs.
Average government borrowing costs across the Group of Seven economies have reached their highest level since mid-2008, while annual interest payments have increased by nearly 85 percent, the IIF added.
Advanced economies paid more than $3.3 trillion in interest on internationally traded government bonds over the past year.
The IIF said that amount was higher than estimated global spending on Artificial Intelligence, defence and clean energy, which stood at $2.6 trillion, $3.1 trillion and $2.3 trillion, respectively.
The institute warned that higher borrowing costs and continued government spending were adding to financial risks despite the relatively stable global debt-to-GDP ratio.
