Global debt has risen to over $365 trillion during the first half of 2026, increasing by $10 trillion over six months, with both China and the United States contributing the largest share of the increase, according to the latest results from the Institute of International Finance (IIF), amid growing concerns about global financial sustainability.
The figure includes total debts in the four main sectors: governments, households, financial institutions, and non-financial corporations, across more than 100 advanced and emerging economies, marking the sixth consecutive quarterly increase, according to the latest report from the Global Debt Observatory released by the banking services group on Wednesday.
Emre Tefvik, the director of global markets and policies at the Institute of International Finance, stated that "the current debt wave differs from previous waves caused by shocks such as the 2008 global financial crisis and the COVID-19 pandemic." Tefvik clarified that the current situation is not linked to a specific crisis but is driven by a super-cycle encompassing spending on healthcare, energy, artificial intelligence, information technology, and defense, adding that the structural nature of spending means that "debt remains."
Global debt increased by $10 trillion during the first six months of 2026, a rise that is less than half of the increase recorded during the same period last year, amid rising borrowing costs and fluctuations related to the war in Iran. The slowdown was more pronounced in financial institutions and households.
China contributed more than $4.8 trillion of new borrowing alone, raising its total outstanding debt to $72.5 trillion, based on calculations using data from the Institute of International Finance. The increase highlighted the growing financial pressures in China, where a decline in land sales revenues and a continued recession in the real estate sector have strained local government income. Corporate debts have also risen, as a group of companies faces lower profit margins due to weak domestic demand and intense pricing competition.
In the United States, total debt rose by $3.5 trillion over the six months, reaching $111.8 trillion, according to the institute's data. The increase appears to have primarily come from the financial sector and the government, while federal debt reached 122.3% of GDP in the second quarter.
U.S. federal debt surpassed $40 trillion for the first time in August, according to the U.S. Department of the Treasury, raising long-term concerns about the country's financial sustainability. Long-term U.S. Treasury yields have risen in recent months to levels not seen since 2007. Additionally, total foreign government holdings of U.S. Treasury debt decreased for the second consecutive month in July, following reductions by Japan and China, two of the top three creditors.
The institute's report indicated that U.S. securities continued to be in strong demand despite increased volatility and speculation, partly due to a lack of depth and liquidity in alternative markets. Meanwhile, the wave of borrowing linked to artificial intelligence in the corporate sector has not yet displaced U.S. Treasury bonds or diverted capital away from emerging markets, but the Institute of International Finance warned that continued issuance of long-term corporate debt associated with artificial intelligence could eventually add pressure to long-term U.S. Treasury yields.