Global debt is again climbing into record territory, reshaping how countries fund budgets, build infrastructure and manage crises. “Debt” is simply borrowed money that must be repaid, typically with interest, by governments (sovereign debt), companies (corporate debt), and households (consumer debt). The concern in 2025–2026 is not only the size of the bill, but who the world owes, in what form, and what happens when repayments collide with slower growth.
Two headline numbers capture the scale. The IMF’s 2025 Global Debt Monitor estimates total global debt (public + private) at $251 trillion in 2024, hovering just above 235% of world GDP after the pandemic peak. The Institute of International Finance (IIF), which tracks broader debt measures, reported global debt at about $345.7 trillion by end-September 2025, roughly 310% of global GDP, driven mainly by mature markets and dollar-translation effects. The point is blunt: even if debt ratios stabilize, the level remains historically high, and refinancing that pile is costly in a higher-rate world.
A “global debt list” looks different depending on the lens. By total debt, the biggest advanced economies dominate because their financial systems are deep and bond markets are huge. By debt-to-GDP, highly leveraged states, often with aging populations or long periods of low rates, stand out. By external debt (owed abroad), many emerging economies look vulnerable because repayments require hard currency. The OECD warns that sovereign and corporate borrowing rose in 2024 and was set to continue rising in 2025, while higher borrowing costs increase refinancing risks.
The most geopolitical split in 2025–2026 is not just who is indebted, it’s how the world borrows: China’s loans versus the United States’ bonds.
The US-bonds model is anchored by the U.S. Treasuries, still treated globally as a premier reserve asset. U.S. Treasury data show foreign holdings of Treasuries at approximately $9.355 trillion in November 2025, a record high reported by Reuters in mid-January 2026. The same Treasury table lists the largest holders in November 2025 as Japan (~$1.203T), the UK (~$0.889T), mainland China (~$0.683T), followed by Belgium and Canada. In practice, this means countries “lend” to Washington by buying tradable bonds, securities that can be sold quickly if investors get nervous.
The China-loans model is more bilateral and project-linked: financing for roads, ports, power plants and telecoms, often through state policy banks or state-backed entities. The Lowy Institute has warned of “peak repayment,” estimating about $35 billion in debt-service flows to China in 2025 from developing countries, with elevated repayments expected for years as earlier lending matures. Recent analysis also points to a post-default era in which China’s overseas lending becomes more selective and increasingly focused on renegotiations and “rescue” financing in stressed cases.
For low- and middle-income countries, the pressure is already measurable. The World Bank’s International Debt Report 2025 says LMICs experienced $741 billion in net external debt outflows from 2022–2024, meaning they paid more to creditors than they received in new external financing, described as the largest such outflow in half a century. That cash drain can force governments to cut spending, raise taxes, reduce imports, or lean on central banks, often with inflationary consequences.
So what happens if debt isn’t paid back? In sovereign finance, “non-payment” rarely starts with an official announcement. More often, it’s a sequence: falling reserves, currency depreciation, rising borrowing costs, credit downgrades, and missed payments that trigger default clauses. Outcomes typically include restructuring, extending maturities, lowering interest, or reducing principal, sometimes under IMF programs.
Yet restructuring is harder than it used to be because the creditor base is more diverse: private bondholders, multilateral lenders, Gulf funds, and China-linked entities can all be in the same queue. A World Bank document from the Global Sovereign Debt Roundtable in late 2025 noted that several restructurings were progressing, while also flagging concerns about collateralized borrowing and transparency.
The macro backdrop for 2026 adds another twist. The IMF’s January 2026 World Economic Outlook Update projects global growth around 3.3% in 2026, steady but hardly booming, meaning debt burdens are less likely to “shrink” via fast growth. In this environment, debt becomes a political story: interest payments compete with wages, welfare, defense, climate adaptation and basic services.
In short, the global debt list is no longer just a ranking, it’s a map of leverage. The U.S. remains the central node of the world’s bond plumbing, while China’s loan networks shape infrastructure and repayment calendars across the developing world. The risk for 2025–2026 is that high debt plus modest growth leaves less room for error, turning shocks into solvency crises faster than before.
