Türkiye bucks trend as global debt increases

The International Institute of Finance (IIF) has released its “Global Debt Monitor” report. The report reveals that global debt rose by roughly $2.1 trillion in the first six months of the year, reaching a total of $312 trillion.

This increase is notably slower than the $8.4 trillion surge observed in the same period last year.

In the same period last year, the estimated amount of global debt was $302.4 trillion.

The majority of the increase in global debt came from borrowing in China and the United States. India, Russia and Sweden also contributed to the rise in global debt. In contrast, many European countries and Japan experienced a notable decrease in their total debt.

According to estimates, the total debt of advanced economies was $210.5 trillion as of the second quarter of the year, while the debt of emerging markets was $101.3 trillion.

Looking at the distribution of global debt:

• Household debt increased to $59.6 trillion during this period
• Non-financial corporate debt rose to $89.6 trillion
• Public debt reached $91.7 trillion
• Debts related to financial companies such as banks climbed to $70.9 trillion

The ratio of global debt to gross domestic product (GDP) generally remained stable, fluctuating around 327%–328%.

Considering the ratios to total GDP, household debt decreased from 62% to 60.9% in the second quarter compared to the same period last year; non-financial corporate debt fell from 91.5% to 90.6%; and financial sector debt dropped from 78.9% to 78.5%. Meanwhile, public debt increased from 96% to 97.6%.

Public debt decreases in Türkiye

In Türkiye, when considering the ratios of debt to GDP, household debt in the second quarter declined from 12.6% to 10.2% compared to the same period last year, non-financial corporate debt fell from 55.6% to 42.8%, public debt decreased from 35.6% to 29.2%, and financial sector debt dropped from 21.2% to 16.7%.

Global debt:

• Increased by $2.1 trillion in the first half of 2024, now totaling $312 trillion.

Türkiye:

• Household debt decreased to 10.2%.
• Non-financial corporate debt fell to 42.8%.
• Public debt reduced to 29.2%.

The report also projects that global public debt will increase from its current level of $92 trillion to $145 trillion by 2030 and then surpass $440 trillion by 2050.