Global debt tops US$300 trillion, and emerging markets owe more than ever
- The world’s debt nearly set a record high in the first quarter of 2023, with sharp increases in mature markets, according to the Institute of International Finance
- Findings come as senior Chinese finance officials have been reiterating concerns over capital outflows from emerging markets, whose debt is up 34 per cent since 2019
Global debt approached a record high in the first quarter of this year, according to the Institute of International Finance (IIF), amid growing concerns over a failure by the US government to meet debt obligations that could trigger global financial chaos.
The assessment also serves as a fresh warning for China, which saw a quarterly rise in its debt-to-gross domestic product (GDP) ratio and has a large exposure to the US Treasury bills.
The global debt pile grew by US$8.3 trillion to US$304.9 trillion in the first three months of the year, the IIF said in a report on Wednesday. The record was set a year prior, when global debt reached US$306.3 trillion in the first quarter of 2022.
In emerging markets, total debt hit a record high of US$100.7 trillion – or 250 per cent of their GDP – up from US$75 trillion in 2019, marking a 34 per cent increase.
“The increase was sharper in mature markets, driven by Japan, the US, France and the UK. Among emerging markets, the biggest increases were seen in China, Mexico, Brazil, India and Turkey,” the IIF said in assessing the global debt situation.