As a whole, debt can be a valuable tool for financing investments, stimulating economic activity, and achieving long-term goals. However, excessive debt can lead to financial instability, reduced flexibility, and increased vulnerability to economic downturns.
This graphic shows the breakdown of global debt by sector for mature and emerging markets in Q1 2024. The figures in the graphic are represented in trillions of U.S. dollars and come from the May 2024 Global Debt Monitor by the Institute of International Finance (IIF) .
Global Debt Rises to $315 Trillion
Global debt rose for the second consecutive quarter, increasing by $1.3 trillion to a new record high of $315 trillion in Q1 2024. In the table below, we can see how mature markets make up $209.7 trillion, which is two-thirds of the global total.
| Households | Non-financial corporates | Government | Financial Sector | Total | |
|---|---|---|---|---|---|
| Global debt | $59.1T | $94.1T | $91.4T | $70.4T | 315.1 |
| Mature markets debt | $39.9T | $50.2T | $63.0T | $56.5T | 209.7 |
| Emerging markets debt | $19.2T | $44.0T | $28.4T | $13.9T | 105.4 |
Despite mature markets having a constantly growing larger share, emerging market debt has also grown at a fast pace to over $105 trillion as of Q1 2024. This is more than double, or a $55 trillion increase, from where emerging market debt levels were a decade ago.
Non-financial corporates made up the largest share of debt in emerging markets at $44 trillion or 42%, signaling that these countries may be leveraging corporate debt heavily for growth and expansion.
Mature Markets Still Hold Most Debt
Despite the significant increase in emerging markets’ debt burden, mature markets still hold nearly double the amount of debt across all sectors.
While most mature market sectors saw minimal year-on-year increases in debt ranging from 0.2% to 1.9%, the government sector had an outsized increase of 4.5%, or $2.7 trillion.
Looking into the remainder of 2024, IIF listed stubborn inflation, rising trade friction, and geopolitical tensions as factors that could put “upward pressure” on global funding costs.
Source: Visual Capitalist
