Global Debt Hits New Record, Surpassing $324 Trillion, IIF Warns of Growing Financial Pressure
Amidst the global economic turmoil, global debt increased by about $7.5 trillion in the first quarter of 2025 alone, pushing the total global debt to a record of more than $324 trillion, according to a new report from the Institute of International Finance (IIF) released on Tuesday.
🌍 Countries Contributing to the Sharp Increase in Debt: China, France and Germany
According to the IIF's "Global Debt Monitor" report, China was the largest contributor to the debt increase, with more than $2 trillion recorded in the first quarter. In addition, France and Germany were also European countries with significant increases in debt.
In contrast, Canada, the United Arab Emirates (UAE) and Türkiye saw modest declines in their total debt, reflecting the fiscal tightening policies being implemented in these countries.
💱 Weak US Dollar Contributes to Global Debt Inflation
The depreciation of the US dollar against other major currencies has contributed to the increase in the value of debt in USD terms, pushing the overall figure higher. Notably, the increase in debt in Q1/2025 was more than four times the quarterly average since the end of 2022 ($1.7 trillion).
📊 Global Debt-to-GDP Ratio Remains High, Emerging Markets Concerned
Although the global debt-to-GDP ratio has been on a slight downward trend, it remains above 325%, a level considered extremely high over the long term, the IIF said. In emerging markets alone, the ratio hit a record 245%, putting pressure on governments struggling with inflation and slowing growth.
Total debt in emerging markets rose by more than $3.5 trillion in the first quarter, bringing the region’s total debt to more than $106 trillion – an all-time high. China leads the way again, with its public debt reaching 93% of GDP and forecast to surpass 100% by the end of 2025.
📈 Investment Opportunity: Should You Consider IIFS?
With the IIF and global debt data taking center stage, the question is: Should you invest in related stocks like IIFS right now?
According to analytics platform InvestingPro, which uses AI algorithms to evaluate more than thousands of stocks, IIFS could be an undervalued “hidden gem.” Many stocks that were picked by the system in 2024 have risen more than 30% in a short period of time. If this scenario is repeated, IIFS could be a remarkable opportunity when the market corrects.
🧠 Conclusion
Global debt is escalating at an unprecedented rate, especially in large economies and emerging markets. While financial risks are increasing, this also opens up new investment opportunities for savvy investors, especially in stocks that have been overlooked or undervalued by the market.