Global debt hits record $353 trillion - Investors flee US Treasury bonds
Investors are showing signs of diversifying away from U.S. Treasury bonds as global debt levels reached a record of nearly $353 trillion by the end of March, according to a report by the Institute of International Finance.
The IIF's quarterly Global Debt Monitor said strengthening international demand for Japanese and European government bonds contrasted with broadly stable demand for US Treasuries since the start of the year.
While there was "no immediate risk" to the $30 trillion US Treasury market, long-term forecasts suggested that US government debt looked increasingly on an "unsustainable path", while debt ratios for the eurozone and Japan were now falling.
Under current policies, the US debt-to-GDP ratio is expected to continue to rise, the report said, while US corporate bond markets continued to thrive, supported by AI-related issuance and strong overseas inflows.
Washington's borrowing push was one of the main drivers as global debt rose by more than $4.4 trillion in the first quarter, the fastest increase since mid-2025 and the fifth consecutive quarterly increase, the IIF report said. The rise in U.S. debt was driven largely by government borrowing.
The report noted a sharp acceleration in debt at the start of the year by Chinese non-financial corporate borrowers – mainly state-owned firms – which significantly outpaced borrowing by the country’s government. Outside the world’s two largest economies, debt in developed markets fell sharply, while emerging markets, excluding China, recorded levels that rose modestly to a record $36.8 trillion, driven by government borrowing.
Looking at the headline ratios, global debt stood at 305% of world economic output, broadly stable where it had been since 2023. However, debt ratios followed a similar pattern to the levels - trending lower in developed markets and steadily rising in emerging economies.
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