Global debt hits $365 trillion, rising interest burden becomes biggest concern
According to the latest IIF data, global debt has reached $365 trillion. Debt is rising rapidly in emerging markets, while the interest payment burden has increased significantly in developed economies.
Kathmandu — The world is weighed down by debt, and global debt has now reached $365 trillion. Citing the latest data from the Institute of International Finance (IIF), a report by Financial Commentary Publication's 'The Kobeissi Letter' has highlighted this burden. It reached a record level in the first six months of 2026. Debt increased by more than $10 trillion in just 8 months.
The IIF chart shows that global debt has been rising continuously over the past several years. From about $250 trillion in fiscal year 2018, global debt is now estimated to reach about $365 trillion in the first half of 2026.
The recent increase in debt figures is particularly evident in emerging markets. According to the Kobeissi Letter, in the first six months of 2026, emerging market debt rose by $6.5 trillion to $110 trillion. Governments and non-financial companies contributed the most to this increase.
The report states that total debt in emerging markets and developing economies, excluding China, has reached about $38 trillion. This highlights growing financing needs outside the world's major developed economies.
Emerging economies are at the center of global debt. Governments continue to borrow to finance public spending, infrastructure, and fiscal deficits, while companies also rely on debt to finance investment and operations. This is creating a situation where governments and companies must now use a significant portion of their income to meet existing liabilities.
According to experts, if debt is denominated in foreign currency, the debt problem can become even more complex for emerging markets. A weak domestic currency can increase the local currency cost of servicing debt denominated in dollars or euros.
Amid rising global debt, the biggest concern is not only the size of the debt but also the cost of servicing it. The Kobeissi Letter estimates that developed economies paid more than $3.3 trillion in interest on government debt last year, far higher than global spending estimates. This includes spending on AI, $3.1 trillion on defense, and $2.3 trillion on clean energy.
These figures clearly show how debt servicing costs have rapidly become a significant burden on public finances. Annual government interest payments in G7 countries have also increased remarkably. The Kobeissi Letter estimates a year-on-year increase of 85 percent. –Agency