Gross global debt reached $365tn or 311 per cent of global GDP in the first half of 2026, according to the Institute for International Finance's Global Debt Monitor. The IIF warns that mature market governments now spend more on interest expense than the world invests in AI, defense, or energy, turning debt into a political issue rather than a macro-financial one.

While the debt-to-GDP ratio fell from a post-Covid peak of 337 per cent in early 2021 to below 310 per cent by 2023—aided by unexpected inflation—the IIF cautions this creates a "deceptively benign picture." Interest costs have risen 1.5 percentage points to 3.3 per cent of GDP in mature economies between December 2021 and August 2026, with the US seeing a 1.6 percentage point increase.

The IIF notes a surge in AI-linked corporate bonds, projected to reach $541bn in 2026 from $90bn in 2023, with average maturities extending to 13.4 years. Meanwhile, concerns over private credit persist despite it comprising only 5 per cent of non-financial corporate debt. The IIF remains more relaxed about private and emerging market debt than high-income government obligations.