On February 25th, Eastern Time, the Institute of International Finance (IIF), headquartered in Washington, D.C., released its latest Global Debt Monitor report. This report typically releases updated data at the end of each quarter or the beginning of the next.
According to the publicly available report summary, global debt climbed to a record $348 trillion at the end of last year, an increase of nearly $29 trillion. This represents the fastest growth since the initial outbreak of the COVID-19 pandemic in 2020, a departure from the previous structure dominated by households and businesses. Government debt in countries such as the United States and the Eurozone accounts for more than $10 trillion.
The IIF specifically highlighted the driving forces of national security-related investments and technological investments such as artificial intelligence, and expects this momentum to continue this year.
The report states that more relaxed financial conditions will help raise funds for government priorities, including defense spending. Large-scale investments in data centers driven by AI development, energy security and transformation, and climate-resilient infrastructure are becoming important growth engines in the global debt market.
Debt is a double-edged sword; while it can provide leverage and promote investment and consumption, it also carries financial risks. If out of control, it can trigger crises such as financial tsunamis. The association warned that fiscal expansion driven by military spending, coupled with lower interest rates and looser financial regulations, will further push up debt.
On the same day, the International Monetary Fund (IMF) released a statement projecting that publicly held federal debt as a percentage of US GDP will rise to 100.7% in 2026 and 109.8% in 2031. The rising ratios of publicly held debt to GDP and short-term debt to GDP pose increasing risks to the US and global economies.
Beyond the national level, corporate borrowers are also active. In January, US investment-grade bond issuance surged, driven by issuers such as large technology companies. Easing financing conditions and strong risk appetite also supported high-yield bonds, leveraged loans, and IPOs.
US President Trump plans to convene executives from major technology companies on March 4th to sign a pledge guaranteeing to bear the electricity costs of high-energy-consuming data centers. Amazon, Meta, Microsoft, xAI, Oracle, OpenAI, and Alphabet are expected to build, import, or purchase their own power supplies. This will inevitably trigger a new round of capital frenzy.
The Global Debt Monitor report also shows that last year, emerging market debt as a percentage of GDP hit a record high of over 235%.
The International Monetary Fund (IMF), in its January 2026 World Economic Outlook, predicts that global economic growth this year will be around 3.3%, with emerging markets growing at slightly over 4%. This growth is clearly insufficient to quickly dilute the rising debt stock, and they face greater risks, especially Brazil, Mexico, and Russia.
