Global debt levels rose to a new record high of nearly $300 trillion U.S. in the second quarter, but the debt-to-GDP ratio declined for the first time since the start of the pandemic as economic growth rebounded, according to the Institute of International Finance (IIF).
Total debt levels, which include government, household, corporate and bank debt, rose $4.8 trillion U.S. to $296 trillion U.S. at the end of June after a slight decline in the first quarter to stand $36 trillion U.S. above pre-pandemic levels.
The rise in debt levels was the sharpest among emerging market economies, with total debt rising $3.5 trillion U.S. in the second quarter from the preceding three months to reach almost $92 trillion U.S.
In a positive sign for the debt outlook, the IIF reported a decline in the global debt-to-GDP ratio for the first time since the outbreak of the pandemic. Debt as a share of gross domestic product (GDP) fell to around 353% in the second quarter, from a record high of 362% in the first three months of this year.
The IIF said that of the 61 countries it monitored, 51 recorded a decline in debt-to-GDP levels, mostly on the back of a strong rebound in economic activity.
Globally, household debt rose by $1.5 trillion U.S. in the first six months of this year to $55 trillion U.S. The IIF noted that almost a third of the countries in its study saw an increase in household debt in the first half of 2021.
