Global Debt Surges to $315 Trillion This Year

May 30, 2024

The world’s economies are adding debt at a level not seen since World War II or the days of the Covid-19 pandemic.

A new report from the Institute of International Finance (IFF) pointed to a global debt wave that is bigger, faster, and more wide-ranging than since WWII, barring the initial bout of pandemic-era stimulus.

As of the first quarter of the year, total global debt amounted to roughly $315 trillion. To put that number in context, if it were evenly distributed among the world’s population of 8.1 billion, every person on the planet would owe roughly $39,000.

The IFF’s report found that the surge in debt was driven primarily by emerging markets, where debt surged to more than $105 trillion, a jump of $55 trillion in the last decade. Among developing economies, China, India and Mexico were responsible for contributing the most debt.

Around two-thirds of the $315 trillion owed originates from developed economies, with Japan and the U.S. contributing the most.

However, despite the higher amount of debt owed by developed economies, the debt-to-GDP ratio for these economies has been falling. Conversely, the debt-to-GDP ratio for developing economies jumped to 257%, pushing the overall ratio for the global economy up for the first time in three years.

Out of the total$315 trillion debt load, household debt, which encompasses mortgages, credit cards, and student loans, among other liabilities, totaled $59.1 trillion. Business debt, which is utilized by corporations for operational and expansion purposes, amounted to $164.5 trillion, with the financial sector contributing $70.4 trillion to this sum. The remaining $91.4 trillion is made up of public debt.

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