A new study by the Institute of International Finance (IIF) reports that global debt has reached a new high of $307, according to a report in the Financial Times. This category leaves out financial derivatives, which are an estimated five times as much again, bringing the total outstanding financial aggregates to close to $2 quadrillion, according to EIR’s estimates.
The rise in interest rates, led by the Federal Reserve of the U.S., has a lot to do with the recent run-up, the IIF report admits. Says the FT: “Total debt—spanning sovereigns, corporates and households—rose by $10 trillion to about $307 trillion in the six months to June, the IIF said in its global debt monitor report published on Tuesday. The previous peak for global debt was in early 2022, before central banks started aggressively raising interest rates.”
“Our concern is that countries will have to allocate more and more to interest expenses,” said Emre Tiftik, the lead author of the IIF’s report. “It will have long-term implications for countries’ funding costs and debt dynamics.”
