The Institute of International Finance announced today, Tuesday, that global debt has reached a record level of $307 trillion in the second quarter of the year, despite rising interest rates restraining bank credit, with markets such as the United States and Japan leading this increase.
The report stated that global debt in dollar terms rose by $10 trillion in the first half of 2023 and by $100 trillion over the past decade. It noted that the recent increase has raised the global debt-to-GDP ratio for the second consecutive quarter to 336%. Before 2023, this ratio had seen a decline over seven quarters.
The report indicated that slowing growth, along with curbing price increases, was behind the rise in the debt ratio. The Institute of International Finance stated, "The sudden rise in inflation was the main factor behind the sharp decline in the debt ratio over the past two years," adding that with moderation in wage and price pressures, even if they do not reach their targets, the debt-to-GDP ratio is expected to exceed 337% by the end of the year.
More than 80% of the recent accumulation of debt came from advanced economies, with the United States, Japan, Britain, and France recording the largest increases. Among emerging markets, China, India, and Brazil represented the largest rises.
