IMF Warns of Borrowing Risks Amid Rising Global Financing Burdens

Global sovereign and private debt reached a new record high of $365.5 trillion by the end of the first half of 2026, according to a report from the Institute of International Finance (IIF) released on September 23, signaling continued borrowing expansion amid inflationary pressures and rising financing costs.

The weekly “Asharq Al-Awsat” report, in its analysis of the IIF data, noted that global debt increased by more than $10 trillion during the first half of the year. Emerging economies accounted for approximately 65% of this increase, equivalent to $6.5 trillion, raising their total debt to around $110.6 trillion, which represents nearly 30% of global debt.

According to the report, total public and private debt amounts to approximately 310% of global gross domestic product (GDP). Although this ratio appears slightly lower than levels recorded by global economies at the beginning of 2021, “Asharq Al-Awsat” argues that the comparison may not reflect a genuine reduction in the debt burden, given the rise in nominal GDP driven by inflation in recent years.

The report highlighted that China’s public debt ratio rose to approximately 103% of GDP by the end of the first half of 2026, compared to around 95% in the same period last year.

In other major economies, India’s public debt ratio stood at approximately 77.5% of GDP, while Brazil’s ratio increased to around 97%, up from 89.5% at the end of the first half of 2025.

“Asharq Al-Awsat” pointed out that risks are not limited to government debt but extend to the private sector, citing that non-financial corporate debt in China reached the equivalent of 144.6% of GDP, alongside the continued rise in US public debt to approximately $40.1 trillion.