Global debt climbed to a record nearly $353 trillion in the first quarter of 2026, while investors increasingly looked beyond United States government bonds for safer long-term opportunities, according to the Institute of International Finance.
Key highlights
- Global debt rises to record nearly $353 trillion
- Investors show signs of diversifying from US Treasuries
- US borrowing drives biggest quarterly debt jump since 2025
- Demand strengthens for Japanese and European bonds
- Emerging market debt hits fresh highs
Global borrowing surges to fresh record
The IIF’s latest Global Debt Monitor showed worldwide debt rose by more than $4.4 trillion during the January-March quarter.
The increase marked the fastest pace of debt accumulation since mid-2025 and the fifth consecutive quarterly rise.
Investors diversify beyond US Treasuries
The report pointed to growing international demand for government bonds in Japan and the euro zone, while demand for US Treasuries remained largely flat.
IIF officials said this suggests investors are gradually diversifying away from US government debt exposure.
US debt outlook seen as unsustainable
The US debt market, now valued at roughly $30 trillion, faces mounting concerns over long-term sustainability.
The report warned that under current policies, America’s debt-to-GDP ratio is expected to continue climbing as government borrowing expands.
China corporate borrowing accelerates
The IIF also flagged a sharp increase in borrowing by Chinese non-financial corporations, particularly state-owned firms.
That rise considerably outpaced growth in Chinese government debt during the quarter.
Emerging markets continue to pile on debt
Emerging market debt excluding China climbed to a record $36.8 trillion, mainly driven by higher government borrowing.
At the same time, debt levels in many developed economies edged slightly lower.
Middle East conflict adds pressure
The ongoing conflict in the Middle East is expected to intensify global borrowing needs through higher defence spending, energy security investments and supply-chain diversification efforts.
The IIF said these structural pressures are likely to keep both government and corporate debt levels elevated over the long term.
What comes next
Markets will closely monitor whether investor appetite for US Treasuries weakens further as debt levels continue rising globally.
Rising borrowing costs and geopolitical uncertainty could also reshape capital flows across bond markets.
FAQs
Q1: How high is global debt now?
Global debt reached nearly $353 trillion by the end of March 2026.
Q2: Why are investors moving away from US Treasuries?
Concerns over America’s rising debt burden and long-term fiscal sustainability.
Q3: Which regions are seeing stronger bond demand?
Japan and Europe are attracting increased investor interest.
Q4: What drove the latest rise in debt?
Mainly higher government borrowing in the US and corporate borrowing in China.
Q5: What risks could push debt even higher?
Defence spending, energy security costs, AI investment and geopolitical tensions.
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