Global debt hits record of nearly $338 trillion, says IIF

Core Insights - Global debt reached a record high of $337.7 trillion at the end of Q2, increasing by over $21 trillion in the first half of the year due to easing financial conditions and a softer U.S. dollar [1][2] Group 1: Debt Increases by Country - China, France, the United States, Germany, Britain, and Japan experienced the largest increases in debt levels in U.S. dollar terms, influenced partly by a weakening dollar [2] - Canada, China, Saudi Arabia, and Poland saw the sharpest increases in debt-to-GDP ratios, while Ireland, Japan, and Norway experienced declines [3] Group 2: Emerging Markets - The global debt-to-output ratio is slightly above 324%, while emerging markets hit a record debt-to-output ratio of 242.4%, with total debt in these markets rising by $3.4 trillion in Q2 to over $109 trillion [4] - Emerging markets face nearly $3.2 trillion in bond and loan redemptions in the remainder of 2025, raising concerns about fiscal strains in countries like Japan, Germany, and France [5] Group 3: U.S. Debt Concerns - Short-term borrowing in the U.S. now constitutes about 20% of total government debt and approximately 80% of Treasury issuance, which may increase political pressure on central banks to maintain low rates, potentially threatening monetary policy independence [7]