Total debt levels, which include government, household and corporate and bank debt, rose $4.8 trillion to $296 trillion at the end of June, after a slight decline in the first quarter to stand $36 trillion above pre-pandemic levels.

This rise in debt levels was the sharpest among emerging markets, with total debt rising $3.5 trillion in the second quarter from the preceding three months to reach nearly $92 trillion.

‘If the borrowing continues at this pace, we expect global debt to exceed $300 trillion,’ said Emre Tiftik, IIF´s director of sustainability research.

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 coronavirus crisis.

Debt as a share of gross domestic product fell to about 353% in the second quarter, from a record high of 362% in the first three months of the year.

The IIF noted 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.

But it added that in many cases the recovery had not been strong enough to push debt ratios back below pre-pandemic levels.

According to the IIF, total debt-to-GDP ratios excluding the financial sector are below pre-pandemic levels in just five countries: Mexico, Argentina, Denmark, Ireland and Lebanon.

The report added that China has seen a steeper rise in its debt levels compared with other countries, while emerging-market debt excluding China rose to a fresh record high at $36 trillion in the second quarter, driven by a rise in government borrowing.

pgh/Pll/msm / lpn/gdc