Global debt soared by around 7 trillion dollars last year, climbing to 318 trillion dollars and hitting a new record. When considering the ratios of debt to GDP in Turkey, household debt fell to 10%, non-financial corporate debt to 39.7%, public debt to 26.6%, and debt of financial entities like banks to 16.3% in the last quarter of the previous year.

The International Institute of Finance (IIF) released its “Global Debt Monitor” report. According to the report, global debt is projected to reach 318 trillion dollars by 2024, a rise of about 7 trillion dollars, setting a new record. This increase falls below last year’s surge of over 16 trillion dollars in borrowing due to the Federal Reserve’s easing cycle. Concerns about the impact of U.S. trade and immigration policies on inflation, along with reduced market expectations for interest rate cuts by the Fed, perceived the slowdown in global borrowing as a cautious stance amid significantly increased uncertainty.

A significant decrease in debt levels was observed particularly in the fourth quarter of 2024. Approximately 65% of the increase in global debt last year originated from developing markets. While the total debt of advanced economies was calculated at 214.3 trillion dollars last year, debt in developing markets was recorded at 103.7 trillion dollars. Looking at the distribution of debt, household debt rose to 60.1 trillion dollars, debt of non-financial corporations to 91.3 trillion dollars, public debt to 95.3 trillion dollars, and debt of financial entities like banks to 71.4 trillion dollars by the end of 2024.

GLOBAL DEBT-TO-GDP RATIO INCREASES FOR THE FIRST TIME SINCE 2020

The global debt-to-GDP ratio surpassed 328% in 2024, rising by over 1.5 percentage points, marking the first annual increase since the over 35-point climb in the global debt-to-GDP ratio triggered by the pandemic in 2020. While the increase in debt contributed significantly to the rise in debt ratios last year, economic growth and a slowdown in inflation in 2024 added upward pressure on debt ratios.

The fastest increase in debt ratios outside the financial sector was seen in Sweden, Nigeria, China, Israel, and Saudi Arabia, while Argentina, Turkey, the Netherlands, Greece, and Ireland witnessed sharp declines. Though a further slowdown is foreseen in global debt accumulation, especially in the first half of 2025, due to record levels of global economic policy uncertainty and persistently high borrowing costs, a more cautious stance among borrowers could hinder credit demand in the private sector. By the end of the last quarter of the previous year, considering the total GDP ratios, household debt dropped from 60.7% to 60.3%, debt of non-financial companies decreased from 91.7% to 91.5%, while public debt rose from 96.3% to 98.5%. Debt related to the financial sector continued to hover around 77.7%. In Turkey, looking at debt-to-GDP ratios, compared to the last quarter of the previous year, household debt decreased from 11.3% to 10%, debt of non-financial companies from 47.5% to 39.7%, public debt from 33.8% to 26.6%, and debt of financial entities like banks from 17.3% to 16.3%.