A report by the International Finance Institute showed today, Tuesday, that the global debt increased by about 7.5 trillion dollars in the first three months of the year to reach an unprecedented high level exceeding 324 trillion dollars.
The institute said that China, France and Germany were the largest contributor to increasing global religion, while the levels of debt in Canada, the UAE and Turkey decreased.
“The sharp decline in the value of the US dollar against the major trading partners’ currencies contributed to increasing the value of debt in dollars, but the rise in the first quarter was more than four times the average quarterly increase of 1.7 trillion dollars that have been allocated since the end of 2022.”
The global debt ratio moved to the output slowly, as it recorded slightly over 325%. But the percentage of emerging markets recorded an unprecedented high level at 245%.
The total debt in emerging markets increased by more than $ 3.5 trillion in the first quarter of the year to an unprecedented level exceeding $ 106 trillion.
The institute said that China had acquired more than one trillion dollars of this height. The percentage of Chinese government debt to GDP reached 93% and is expected to reach 100% before the end of the year.
The nominal values of the debts of emerging markets, unlike China, also recorded an unprecedented number, as Brazil, India and Poland witnessed the largest increases in the value of its debt in dollars. However, the institute’s data showed that the debt ratio to the gross domestic product in emerging markets other than China decreased to less than 180%, or about 15 percentage points of its highest levels ever.
Emerging markets also face a record of $ 7 trillion for bond recovery and loans in the remaining period of 2025, and the number of advanced economies reached about 19 trillion dollars.
The effect of trade war
The dollar has reduced the impact of the trauma for developing economies, as it limited the impact of the emerging markets from a rise in fluctuations from the trade war launched by US President Donald Trump.
“If a period of blurring of policies is prolonged, there may be a need for fiscal policy to become more adaptive, especially in countries with strong commercial ties to the United States,” the institute said.
There is also concern about the levels of American debt and the extent of influence on the returns of American bonds from the great financing needs of the world’s largest economy that belongs to reasons, including the endeavor of tax reduction.
The institute said, “The large height of the supply of US Treasury bonds may cause pressure that raises the returns and strongly increases the expenses incurred by the government due to the benefit … In light of such perception, the risk of inflation will also rise,” the institute said.
The Trump administration sees in customs duties as a way to fill the gap in the budget resulting from expected tax reduction, but the fog that surrounds commercial policy and its implementation turmoil is slower and impact on American growth.
“It is also possible that customs duties (which amount to 10% globally) ultimately lead to reducing government returns if they lead to a response from other countries,” the institute’s report also said.
