world economy. The bulk of the recent rise in global debt came from mature markets, particularly the United States, China, France, Germany and the United Kingdom . Government borrowing expanded as countries financed higher defense spending, social programs and long-term energy transitions, while corporate debt issuance remained strong amid refinancing needs and investment activity. Despite tighter monetary policy in many regions, borrowing has continued as fiscal pressures persist and economic growth remains uneven. Analysts note that higher interest rates have not yet translated into a meaningful slowdown in debt accumulation. Global debt has risen steeply in recent years. At the end of 2024, total debt stood near $318 trillion , before accelerating through 2025 amid geopolitical uncertainty, slower growth in key economies and elevated public spending. Currency movements have also played a role. A weaker U.S. dollar during parts of the year increased the dollar-denominated value of debt held in other currencies, amplifying headline figures. Economists warn that sustained high debt levels could limit governments’ ability to respond to future economic shocks. Rising interest payments are already consuming a larger share of public budgets, particularly in heavily indebted countries. For emerging markets, the risks are more acute. Higher global interest rates and large refinancing obligations increase vulnerability to capital outflows and financial stress. Meanwhile advanced economies face the challenge of balancing debt sustainability with political and social demands for continued spending. The IIF has cautioned that without stronger economic growth or credible fiscal consolidation plans, debt-to-GDP ratios could continue to rise, increasing long term risks to financial stability. As central banks and policymakers navigate a fragile global recovery, record high debt levels remain one of the most significant structural challenges facing the world economy. Sources: •Institute of International Finance (IIF) , Global Debt Monitor • Reuters , Global debt coverage citing IIF data • Investing.com , Reporting on IIF global debt estimates